Falana To FG: Recover $118.67bn, N66.4bn in Outstanding Oil Sector Funds

Human rights lawyer Femi Falana has urged the Attorney-General of the Federation and Minister of Justice, Lateef Fagbemi, to take immediate legal steps to recover over $120.5 billion and N66.4 billion owed to the federal government by the Nigerian National Petroleum Company Limited (NNPCL), international oil companies (IOCs), and other industry operators.

Falana, in a letter on behalf of the Alliance on Surviving Covid-19 and Beyond (ASCAB), stated that court rulings, government investigations, and federal agency reports confirm that these substantial amounts, comprising unpaid royalties, taxes, dividends, and other revenues, are still unpaid and must be remitted to the Federation Account.

The senior lawyer warned that if the Attorney-General does not initiate recovery actions within 14 days of receiving the letter, ASCAB would seek a court order compelling him to act in accordance with his constitutional and legal duties.

Falana identified five main categories of funds to be recovered.

The largest portion, he said, is $62 billion in unpaid royalties owed by international oil companies, due to the federal government’s failure to enforce the Deep Offshore and Inland Basin Production Sharing Contracts Act.

He explained that Section 16 of the law requires royalty increases when crude oil prices exceed $20 per barrel, but this was overlooked for 18 years, resulting in significant revenue loss.

Falana also stated in the letter that the governments of Akwa Ibom, Bayelsa, and Rivers approached the Supreme Court and that on October 20, 2018, the apex court issued a consent judgment instructing the federal government to recover these royalties and pay the states their 13% derivation entitlement.

The right advocate further stated that a committee set up by former Attorney-General Abubakar Malami concluded that $62 billion could be recovered from the international oil companies.

He also mentioned that the Federal High Court has issued judgments supporting Akwa Ibom, Rivers, and Bayelsa states’ claims to their share of the disputed royalties.

The lawyer further urged the government to recover $29 billion in proceeds from crude oil theft and undeclared exports.

He also pointed out that findings by lawyers hired by NIMASA reportedly showed that 60.2 million barrels of crude, worth about $12.7 billion, were discharged at the Port of Philadelphia, USA, between 2011 and 2014.

Falana also cited a House of Representatives ad hoc committee report that estimated that $17 billion in crude oil and LNG exports left Nigeria without proper records during the same period.

He called on the Attorney-General to direct the EFCC to recover the funds from the oil and shipping firms involved.

Regarding Nigeria LNG Limited (NLNG), Falana accused NNPCL of failing to remit $21.5 billion in dividends received on behalf of the federal government.

He pointed out that NLNG paid over $44 billion in dividends over 26 years, with NNPCL, holding a 49% stake, receiving about $21.5 billion, which has not been remitted to the Federation Account despite several recommendations and resolutions.

Falana also referenced NEITI’s 2022/2023 report, which identified $6.071 billion and N66.4 billion in outstanding revenues as of June 2024.

He criticised the National Assembly for approving a $2.1 billion external loan request in November 2024 amid these recoverable revenues.

The lawyer urged the Attorney-General to recover $2.9 billion spent on rehabilitating the Port Harcourt, Warri, and Kaduna refineries, noting contractual breaches by foreign contractors and operational issues, including refinery shutdowns.

He called for an EFCC investigation into the contracts and recovery of related funds.

He emphasised that recovering these sums would boost government revenue and lessen dependence on external borrowing.

“If the said sum is recovered, the Federal and state governments will avoid further external loans,” the letter stated.

Falana asserted that ASCAB has the legal standing to pursue legal action if necessary, citing its role in advocating amendments to the contracts law, which President Buhari signed into law in 2019.

As of now, neither the Office of the Attorney-General nor NNPCL has publicly responded to these claims and requests.