NCDMB raises alarm over tax violations by indigenous oil operators 

Wabote expressed displeasure over the attitude of such indigenous operators who he said are biting the fingers that fed them. 


The Nigerian Content Development and Monitoring Board (NCDMB) has decried the trend among Nigeria’s budding indigenous oil operators who have turned out to be serial violators of the Content Act by evading and under-remmitting taxes due to the federation.


Simbi Wabote, the Executive Secretary of NCDMB revealed this at a breakfast workshop with the Guild of Corporate Online Publishers (GOCOP) in Abuja Tuesday morning


Wabote expressed displeasure over the attitude of such indigenous operators who he said are biting the fingers that fed them.


He said: “We fought for you but you now sabotage the oil economy”.


He accused them of harbouring a sense of entitlement thus relying on high-level their  connections in friends in high office to cheat the system and stymie the growrh of the industry and economy through their unlawful acts of tax-dodging and under-payments.


He said the indigenous operators try to save costs and care for profit more than national interest. “They want to be exempted from some critical tenets of the Content Act. We have however, made it clear that the law is for all.”


Wabote also said it is wrong for a local contractor to win a job and employ 90 per cent expatriates, thereby causing job loss to Nigerians.


He said they should stop the practice of project execution without getting due approvals. adding that they also stop using workers not registered in the expertise ledger


He said: “They find it difficult to pay the one per cent levy stipulated by the Act. That is why the EFCC (Economic and Financial Crimes Commission) is now after them. They call to accuse me of sending the EFCC after them”.


Wabote said Nigeria has moved from three per cent local content value in the oil industry to 54 per cent.


He noted that if indigenous operators don’t arrest the growth path by undermining the regulatory system, Nigeria will hit the 70 per cent target set by the Board.


On divestment by oil majors, Wabote said there is nothing to fear and that the international oil companies (IOCs) were not fleeing Nigeria but only responding portfolio rationalization, a global trend in the sector.


He said it is important to understand this scenario and he outlined the advantages and disadvantages so far.


On the good side, the petroleum engineer who worked in SPDC for over two decades said so far, 60 per cent of domestic gas and 15 per cent of crude oil are being produced by indigenous producers.


On why the IOCs were divesting in the first place, the ES said they want to concentrate on offshore areas. “Nigerians should not fear. The IOCs are not running away. They are only doing portfolio rationalization. It is not in Nigeria alone. The IOCs carry out this exercise anywhere that profit falls below a particular threshold.”


He said the local players make more profit out of such divested areas. “Thus, there is no need to fear. It is common in the industry. Even in the Gulf of Mexico, it has been done.”


The expert who is said to have become an international consultant on oil industry issues said there is this concept of red and blue waters. Red water, he said, is used in the industry to indicate shallow waters where all manner of sharks do operate. There is always blood in such waters and the water turns red. But in deep waters, small fishes do not get near, so few fishes are there and the water is always blue because there are no attacks.


Thus, only few players are in the offshore. Some wells are 2km beneath the surface. No diver gets near that depth because they cannot survive the pressure there. Some are even 3.5km deep. It’s only the IOCs that have the kind of fund and tech needed to operate in such waters, he tutored the newsmen.


On risks of divestment to Nigerians, he said tax is dropping. “The Indigenous producers don’t like to pay tax. It raises the inquiry or concerns of; where is the tax threshold; Is it higher with IOCs and if so, why?”


He said the presidency has seen this and has taken action. “They will identify the problem and fix it.”


He pointed at some trends and how indigenous companies such as Seplat, Aiteo, etc, have snapped up some oil wells from the IOCs, and the impact tis has had on the industry.


“Divestment has paid off in the area of boost in production. For instance, an indigenous producer has increased the production it inherited from 20,000 bpd to 75,000. In Nembe Creek, AITEO has increased from 30,000 to 80,000 bpd in Nembe. This was before the pipeline attacks came much harder. Oando is to grow 900m reserves after acquisitions it made.”


He admitted that there is crude oil theft, massive pollution, illegal refining activities at the shallow waters to add to the pressure on the IOCs to move away from the shallow waters to the deep blue waters.