Reps Probe Non-remittance On Natural Gas Equity

The House of Representatives has agreed to investigate the non-reporting and non-remittance of Equity Liquefied Natural Gas (LNG) to Nigerian National Petroleum Company Limited (NNPCL).

This followed the motion moved by the member representing Ndokwa East/Ndokwa West/Ukwuani federal constituency, Hon. Nnamdi Ezechi, at plenary on Wednesday.

Moving the motion, Ezechi said NLNG was incorporated in 1989 as a joint venture between NNPC Limited, Shell, TotalEnergies, and Eni, with NNPC Limited holding the largest equity share of 49%.
The lawmaker noted that NNPC LNG Limited was incorporated in 2012 in the Cayman Islands as a subsidiary of NNPC Limited to manage the sale of Liquefied Natural Gas (LNG) on behalf of the group.

He expressed worry that “the financial transactions, statements, and operations of NNPC LNG Limited in the Caymans have not been transparently reported to either NNPC Limited or LNG, resulting in potential non-remittance of dividends, taxes, and other statutory payments due to the Federal Government of Nigeria.

“Certain deductions are allegedly being made from NLNG proceeds, including from the sale of Liquefied Natural Gas known as Equity LNG, without the formal notification, disclosure, or approval of the Federal Government, thereby raising serious concerns of financial impropriety and potential loss of national revenue.”

Also at the plenary, the House mandated the Committee on Host Communities to investigate the failure of the oil and gas companies to release 3% of their annual operating expenditures to host communities and their refusal to incorporate the Host Communities’ Development Trust Fund under the Petroleum Industry Act, 2021.

This followed the adoption of a motion moved by Hon. Hart Cyril Godwin from Rivers state who said Section 235 subsection (1) of the PIA makes it mandatory for every licensee or lessee (settlor)
whose area of operations is located in or appurtenant to any community to incorporate the Host
Communities Development Trust Fund for the benefit of the host community.

He expressed worry that some Oil Companies violate the provisions of Section 236 of the PIA by failing to
incorporate the Host Communities Development Trust Fund in their areas of operation within the period stipulated in the Act, while others have bluntly refused to incorporate the Host Communities Development
Trust Fund.

According to the lawmaker, failure to fund the Host Communities Development Trust Fund has hampered the development of the host communities where the companies operate.