Motolani OseniFederal Government has said that has generated about N2 trillion from royalty recovery scheme aimed at recovering royalty indebtedness by exploration oil firms operating in the country. Oil and gas royalties refer to funds received from the production of oil or gas, free of costs, except taxes. It can also be described as the cash value paid by a lessee (oil firm) to a lessor (Nigerian government) or to one who has acquired possession of royalty rights, based on a percentage of gross production from the property, free and clear of all costs. Speaking during a Ministerial Briefing on the achievements of DPR on COLT and other automation initiatives at DPR office in Lagos on Monday, the Minister of State for Petroleum Resources, Dr Ibe Kachikwu, explained that the royalty indebtedness recovery which is largely pushed by the Presidency was aimed to recover a lot of royalty that was outstanding by most of the players in the field. He said that the process of determining royalty in the past was largely driven by initiatives of oil companies that determine what they produce and the government calculates the royalty based on their own figure. “But now, we have been able to use the system, and we can now to see what the actual productions are. Under the rule, you don’t get your renewals unless the outstanding royalties are paid”, he noted. According to him, for those that have shown the seriousness and mapped out how they intend to settle their indebtedness, we will review, but we won’t give out the final certificate until you have settled and this has generated about N2trillion so far as a result of this royalty recovery scheme. “Another one is the Accelerated Lease Renewal Program (ALRP) which was put in place in 2015 for the purpose of creating revenue for the government. In 2015/2016, remember our revenue was very down and the whole idea was to find money and reduce loans. We reviewed the fees payable for renewals by 50-100 per cent, and we are able to renew quite a number of fields. It’s a voluntary scheme; it does not compel you before it is due for you to apply. It is simply saying it is nice for you to apply and most people have responded. By the time we finish, we would have generated income of about $1.5billion. This is perhaps the highest we have generated in terms of renewals,” he said. In his welcome address, the DPR Director, Mordecai Ladan, said the minister has been involved in the projects, “so we called him to engage the media in discussing and showcasing some milestones that have been achieved by the regulatory agency of the petroleum ministry, the DPR. Today is the D-day and you are highly welcome the honourable minister.
FG recovers N2trn from oil & gas royalty debts
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