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Nigeria attorney general expects "colossal" sums from oil majors

Published 23/09/2019, 17:34
© Reuters.  Nigeria attorney general expects "colossal" sums from oil majors
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By Karin Strohecker

LONDON, Sept 23 (Reuters) - Nigeria is claiming "colossal"

sums of money from oil majors, its attorney general said on

Monday, under regulations that allow the government to revisit

revenue sharing from petroleum sales if crude exceeds $20 a

barrel.

Abubakar Malami said a number of court cases were already

underway.

The government in Africa's largest oil exporter relies on

oil for some two-thirds of its revenue and its economy is still

largely dependent on crude production despite efforts to

diversify away from the industry.

A 1990s law that governs oil production sharing contracts

allows the government to review revenue sharing once the oil

price rises above $20 per barrel.

Asked about the government's demands to recover revenue from

international oil companies (IOCs), Malami said the sums in

question were "huge".

"We are taking steps to recover what we feel is due," said

Malami, adding he could not give a precise figure as multiple

actions and suits were underway.

"One thing I can say is that the amount is substantial and

colossal, there is no doubt about it," said Malami, not naming

the companies.

Earlier this year, industry and government sources told

Reuters that Royal Dutch Shell RDSa.AS , Chevron CVX , Exxon

Mobil XOM , Eni ENI.MI , Total and Equinor were each asked to

pay the central government between $2.5 billion and $5 billion.

A spokesperson for Shell in Nigeria said on Monday: "We do

not agree with the legal basis for the claim that we owe

outstanding revenues and the matter is pending before the

court."

Exxon declined to comment. Eni, Total, Equinor and Chevron

did not immediately respond to requests for comment.

Oil majors are keen to get involved in developing and

operating Nigeria's giant offshore fields.

Malami is in London as part of a delegation of Nigerian

policymakers who will meet stakeholders and investors as well as

attend a court hearing on a $9 billion arbitration case the

government disputes. Nigeria's central bank governor Godwin Emefiele, also part

of the delegation, accused oil majors of having dragged their

feet on purpose rather than initiating a review once oil prices

crossed the $20 per barrel threshold.

"You think it should be forgotten and we shouldn't revisit

it given that it resulted in substantial loss of revenue to the

government?" said Emefiele. "It stands for me to reason that the

IOCs deliberately did not trigger event for review because it

benefits them - and that is something that we kick against."

Nigerian policymakers are due to attend a court hearing on

Thursday after a judge in August said he would grant a firm

called Process and Industrial Developments Ltd (P&ID) the right

to seek to seize some $9 billion in assets from the government

over an aborted gas project.

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