FG drags oil companies to court over $12bn crude theft

The Federal Government has dragged International Oil Companies, IOCs to court over crude theft totalling $12 billion.

FG’s action is targeted at recovering over N2 trillion in missing revenue from the IOCs operating in the country. The missing revenue is the value of over 57 million barrels of crude oil shipments that were believed to have been undeclared or under-declared between 2011 and 2014.

The FG, in the suits, is praying the Federal High Court, Lagos, to compel the oil firms to pay into its account with the Central Bank of Nigeria (CBN), the sum of over $0.6 billion (comprising $51,033,180, $462,681,780, and $145,551) in the first instance, being the value of missing revenues accruable to the government of Nigeria from the shortfall/undeclared/under-declared crude oil shipments made by the defendants.

Read also: Nigeria needs to raise gas prices to bridge $55bn gap

The suits were filed on the government’s behalf by a team of lawyers led by Prof. Fabian Ajogwu, SAN.

According to the lawyers, significant crude oil theft for which payment is being sought, takes the form of accounting fraud, non-declaration or under-declaration of crude and gas cargoes.

Giving an instance, the team of lawyers said there are some cases where it was discovered that an oil tanker declared that it loaded about 50,000 barrels at Nigeria’s port, but the same vessel on arrival at a port in the United States, discharged over 60,000 barrels of crude oil revealing a difference of 10,000 extra barrels uncounted for, noting that it is all these cumulative differences that account for the losses running into billions of dollars in lost revenues.

It would be recalled that President Muhammadu Buhari had said at the inception of his administration that a lot of the oil theft under his predecessor’s administration went on with the collusion of international oil tankers that lift Nigeria’s crude on behalf of the IOCs and the Nigerian National Petroleum Corporation (NNPC).

This led the President to olace a ban on 113 vessels from lifting the country’s crude oil. He later reversed the ban due to pressure from vessel owners and a decline in the shipment of Nigerian oil.

According to the lawyers, there is documentary evidence to show that over 57 million barrels of Nigeria’s crude oil was illegally exported by the oil companies and sold to buyers in the US alone from January 2011 to December 2014. The lawyers in the court papers, also submitted that the missing revenue due to Nigeria as a direct result of this non-declaration and/or under-declaration of shipments made between 2011 and 2014 to buyers in the US alone is valued at $12,722,600,327.

The case is yet to be assigned to any judge.

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