The Nigeria Extractive Industries Transparency Initiative (NEITI) said it has successfully recovered $4.85 billion from unpaid liabilities owed by oil and gas companies in Nigeria, marking a significant step in the agency’s ongoing efforts to promote transparency and accountability in the extractive sector.
The recovered sum is part of a larger $8.26 billion in outstanding obligations identified in NEITI’s 2021 oil and gas audit report. However, despite this recovery, billions remain unpaid, raising concerns about revenue leakages and the financial burden on the government as it struggles to fund critical projects.
Speaking at a press conference in Abuja, NEITI’s Executive Secretary, Dr. Orji Ogbonnaya Orji, stated that while significant progress has been made in recovering funds, unresolved financial liabilities continue to pose a major challenge.
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“So far, over $4.85 billion was recovered from the disclosures of $8.26 billion made by NEITI in its 2021 oil and gas report. In the 2023 industry reports released in September 2024, NEITI disclosed liabilities of $6.175 billion and N66.378 billion, showing a significant decline from the liabilities of the 2021 reports, yet worrisome because of the need for government to find resources to fund its 2025 budget,” Orji said.
He lamented that despite NEITI’s continuous efforts to ensure financial accountability, several oil and gas companies still default on their payments. He urged the Federal Inland Revenue Service (FIRS) and the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) to adopt more stringent enforcement measures against defaulters to prevent further revenue losses.
“NEITI is therefore calling on relevant agencies responsible for collecting these revenues to do the needful and support our governments at all levels to provide the much-needed infrastructure for our citizens,” Orji stated.
To highlight the economic significance of these unpaid debts, Orji provided an analysis of how the funds could impact national development if fully recovered.
“Analyses of how these liabilities, when paid, could support the federal government’s domestic revenue mobilization reveals that the liabilities, when converted at N1,500 to one dollar, would amount to N9.33 trillion.
“The sum is more than the federal government’s total budget for health, education, agriculture, and food security, which totaled N8.73 trillion. Further analyses show that the sum is also more than the total budget for national security at N6.11 trillion, health at N2.48 trillion, and social welfare of N724 billion all put together. The liabilities can also knock off about 72% of the federal government’s budget deficit of N13 trillion for 2025,” he explained.
Orji stressed that the urgency of revenue recovery could not be overstated, as Nigeria faces mounting fiscal challenges. He called on relevant government agencies to ensure that oil companies meet their financial obligations, noting that improved revenue mobilization is essential for the country’s economic stability.
In a related development, NEITI announced plans to review a series of oil block divestments worth $6.03 billion, involving 26 assets sold by five International Oil Companies (IOCs). The divestments include major deals such as Shell’s $2.4 billion sale to Renaissance, ExxonMobil’s $1.28 billion transfer to Seplat, and TotalEnergies’ $860 million sale to Chappal Energies. Orji stated that these transactions are reshaping Nigeria’s oil and gas landscape, making it imperative to ensure that they are conducted transparently and in line with regulatory requirements.
“NEITI recognizes the urgent need for transparency in these transactions to protect national interests, host communities, and revenue flows. To achieve this, NEITI will expand industry reports to include dedicated sections on divestments and intensify collaboration with NNPC Ltd. and other government agencies to disclose forward sales data,” Orji said.
He explained that NEITI would work closely with the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) and the Nigerian National Petroleum Company Limited (NNPC Ltd.) to oversee these divestments and ensure full disclosure of all financial, social, and environmental aspects of the transactions. The agency will expand its industry reports to include detailed sections on divestments while intensifying collaboration with government agencies to disclose forward sales data.
Beyond financial transparency, Orji raised concerns about the environmental impact of these divestments. He cautioned that some oil firms might have exited their operations without adequately addressing the environmental damage caused by their past activities.
“NEITI will work with regulatory agencies, including the Ministry of Environment, to ensure oil firms are held accountable for clean-up costs and remediation efforts,” Orji said.
He stressed that host communities must not be left to suffer the consequences of oil exploration and that proper clean-up efforts must be enforced before companies are allowed to complete their exits.
In addition to the divestment review, NEITI is set to examine Nigeria’s forward sales of crude oil, particularly transactions where oil is exchanged for loans. The decision comes amid growing concerns from local refineries about inadequate crude oil supply, which has affected domestic refining operations.
Providing a broader industry overview, Orji revealed that Nigeria had earned $831 billion from oil and gas revenues since NEITI began sector audits 23 years ago. He also disclosed that over $4.85 billion had been recovered from the disclosures of $8.26 billion made in NEITI’s 2021 oil and gas report.
“As we commence the 2024 Oil, Gas, and Solid Minerals Reports, we will expand our reporting framework to address forward sales and pre-export financing transactions,” he stated.
While acknowledging Nigeria’s progress in promoting transparency within the extractive sector, Orji noted that institutional constraints and funding limitations continue to pose challenges to achieving full accountability.
NEITI’s findings come at a time when the Nigerian oil industry is experiencing a shift, with IOCs exiting onshore and shallow-water operations due to security concerns.
Earlier this year, Shell completed the sale of its Nigerian onshore subsidiary, Shell Petroleum Development Company (SPDC), to Renaissance, a consortium of mostly local companies. The move was part of Shell’s broader strategy to focus on deepwater and integrated gas assets. Similarly, TotalEnergies sold its 10 percent stake in 15 oil mining leases and the Forcados and Bonny export terminals to Mauritius-based Chappal Energies for $860 million.
Experts attribute these exits to the growing insecurity and vandalism of oil infrastructure in the Niger Delta. With pipeline attacks and crude theft becoming more rampant, multinational oil companies have found it increasingly difficult to sustain onshore operations. This has led them to shift focus to offshore fields, where security risks are significantly lower.
NEITI’s latest report underscores the urgent need for stricter enforcement of financial accountability in Nigeria’s oil sector. With billions in unpaid obligations, the government faces a critical challenge in ensuring that oil companies fulfill their financial responsibilities while also addressing the economic consequences of IOC divestments.