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Nigeria Underpaid by $37 Billion for Oil Assets

Nov. 1 (Bloomberg) -- Nigeria, Africa’s biggest oil producer, lost at least $37 billion in revenue over the last decade because of underpayments for crude sales, royalties and signature bonuses for oil-exploration concessions, a report prepared for President Goodluck Jonathan showed.

The report, obtained by Bloomberg, was prepared by a team set up by the Petroleum Minister Diezani Alison-Madueke in February and is due to be released publicly tomorrow. Collusion between government officials, Nigeria National Petroleum Corp. and people working for its partners, who include Royal Dutch Shell Plc and Exxon Mobil Corp., resulted in the losses, according to the report.

Fidelis Pepple, a spokesman for NNPC, declined to comment. Kingsley Agha, director of information at the Petroleum Ministry, said the report will be submitted to the president tomorrow and declined to comment on its contents. Tony Okonedo, a spokesman for Shell, and Nigel Cookey Gam, a spokesman for Exxon, said their companies will comment after the report’s release.

Shell is the biggest oil operator in Nigeria, followed by Exxon Mobil. Along with Chevron Corp., Total SA and Eni SpA, they run joint ventures with the state oil company, NNPC, that pump more than 90 percent of the country’s oil. Crude exports account for more than 95 percent of Nigeria’s foreign earnings and 80 percent of government revenue, according to the Petroleum Ministry.

The panel headed by Nuhu Ribadu, a former chairman of the country’s financial crimes agency and presidential candidate of the opposition Action Congress of Nigeria, was appointed in line with President Jonathan’s pledge of accountability after a week of strikes and protests in January against his administration’s cut in fuel subsidies. The subsidies were partially restored and the government said it would probe oil industry spending and revenue to help improve savings.

To contact the reporter on this story: Elisha Bala-Gbogbo in Abuja at ebalagbogbo@bloomberg.net

To contact the editor responsible for this story: Antony Sguazzin at asguazzin@bloomberg.net

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