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FG seeks increase in IOC’s oil royalty, taxes to federation account

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The Federal Government has demanded a surge in oil royalties and taxes being paid into its covers by the International Oil Companies (IOCs). Minister of State for Petroleum Resources, Dr. Ibe Kachikwu, who declared this when he led top officials of the ministry, including the Executive Secretary of Nigerian Content Development and Monitoring Board (NCDMB), Simbi Wabote, on a sight-seeing tour of Total’s Egina Floating Production Storage and Offloading (FPSO) vessel at LADOL integrated facility in Lagos, maintained that the age when oil companies invests as much as $70 billion on offshore oil exploration and production but gave zero royalty to the government is winding up.

The minister added that the government had also set an eight-year target to end multi-billion dollars repatriation on FPSO fabrication by IOCs. Tasking other oil majors to improve on the 30 per cent local content feat achieved by Total on the $16 billion Egina investments, Kachikwu urged them to also improve on their contributions to the federation account through royalties and taxes.

“We will make sure that the local content will continue to build the service. Those (IOCs) on Bonga, Zabazaba and others (projects) should begin to talk early to Simbi Wabote,” he said. Henceforth, IOCs, he continued, should start thinking of how to improve what goes into the federation account.

“As you look at your numbers in terms of how you wish to develop these fields, please spend a good amount of time in checking the bottom line and what goes to federation account.

There is no need building a huge $70 billion facility and nothing goes to federation account like one field which pays no single royalty to the federal government for one reason or the other. Such things won’t happen anymore.

“So the terms will change and the basis at which we proceed will change,” he said. He commended Total for taking such huge risk in $16 billion Egina project. Executive Secretary of NCDMB, Wabote, maintained that the government had set a target of eight years to end repatriation of funds by IOCs on FPSO fabrication investments.

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