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FG Sues Oil Firm Over $3bn Unpaid Taxes
The Federal Government, through the Office of the Attorney-General of the Federation, has commenced legal proceedings against Addax Petroleum Development Nigeria Ltd, a Chinese-owned oil firm, over the company’s alleged under-remittance of $3billion in taxes and royalties.
Documents before Justice Mojisola Olatoregun showed that the funds are outstanding claims against the company under the Petroleum Profit Tax Act and Petroleum (Drilling and Production) Amendment Regulation 2003 over Oil Mining Leases (OMLs) 123, 124, 126, and 137.
Joined as respondents are Addax Petroleum Development Nigeria Ltd, Addax Petroleum Exploration Nigeria Ltd, the Nigerian National Petroleum Corporation (NNPC), the Ministry of Petroleum Resources, Department of Petroleum Resources, and the National Petroleum Investment and Management Services (NAPIMS).
D.A. Awosika and Partners, counsel representing the Federal Government, stated that the $3billion unremitted funds came as a result of the oil multinational’s illegal and irregular reliance on side letters dated November 21, 2001, December 20, 2001, and August 24, 2004, that were never gazetted.
The government moved to recover the funds from Addax after report on how the Chinese firm allegedly paid millions of dollars in bribes to Nigerian officials to secure juicy contracts in the oil industry.
In 1998, Addax Petroleum, a subsidiary of China’s Sinopec Group, one of the world’s largest oil and gas producers, entered into a Production Sharing Contract (PSC) with the NNPC (as concessionaire) in respect of OPL 98/118 and OPL 90/225.
Four years later, the company discovered oil in commercial quantities and the OPLs were converted into Oil Mining Leases (OMLs) 123/124 and 126/137.
The PSC entered by the two parties required Addax Petroleum to pay royalties on any oil produced from the relevant oil blocks at the rate of 20 per cent as stipulated by law. It also provided that the Petroleum Profit Tax Act (PPTA) applicable to the contract areas shall be 65.75 per cent for the first five years, starting from the first day of the month of the first sale of the oil, and 85 per cent thereafter.
D.A Awosika & Partners are insisting that Addax Petroleum fraudulently obtained a side letters in 2001 and 2004 that were “never gazetted” and which they used in calculating their taxes and royalties.
The calculations in the side letters fixed the PPT payable by the company at 60 per cent, and rather than the 20 per cent flat rate of royalty, provided for a graduated rate depending on the volume of oil produced from the oil blocks.
The said letters were signed by then Special Assistant on Petroleum and Energy to former President Olusegun Obasanjo, Mr. Funsho Kupolokun, in 2001 and the then Director General/Special Adviser on Budget to the President in 2004, Mr. Olabode Agusto.
“Several objections and protests were raised by Federal Inland Revenue Service (FIRS), NNPC, and DPR to the reliance on these side letters by the defendants to bypass, supplant, and subvert the process,” the government’s lawyers stated.
“In 2003, in order to give effect to the graduated royalty regime stated in the side letters, the Minister of Petroleum Resources (Obasanjo) issued the Petroleum (Drilling and Production) Amendment Regulations, which provided for graduated royalty rates for onshore and shallow offshore PSC which did not account for royalty by tranches.
effect from the first day of January, 2000, which was the same date of commencement of the graduated royalty rates contained in the side letters.”
Several meetings between Nigerian government officials – represented by the FIRS, DPR, and NNPC – and representatives of Addax Petroleum reassess and resolve the latter’s “colossal underpayment” to the government between 2007 and 2012 yielded no results.
But Addax Petroleum maintained its right to the use of the side letters for computing the taxes on its operations and dragged the government over accusations of a breach of their 1998 PSC on the oil blocks.
In suit FHC/ABJ/CS/1099/2014 filed before former Chief Judge of Federal High Court Ibrahim Auta, the company sought a judicial approval towards their continued use of the side letters to compute its financial obligations to the Nigerian government.
However, on May 26, 2015, three days before the administration of the then president, Goodluck Jonathan, handed over to his successor, Muhammadu Buhari, the government negotiated a controversial out-of-court settlement with Addax Petroleum, agreeing to pay the company $3.4billion (about N1trillion).
Court papers filed by the Nigerian government’s lawyers stated that Addax Petroleum “surreptitiously teamed up” with some officials of DPR, FIRS, and NNPC to execute certain terms of settlement that were eventually made the Consent Judgment of court, notwithstanding the pendency of several applications yet to be heard by the same court.
“In executing the said terms of settlement, the authorities were not sought, no approval at Federal Executive Council level was given, the governing boards of the FIRS, NNPC and DPR did not authorise those officers that executed the bogus terms of settlement to so act,” the lawyers argued.
However, when President Muhammadu Buhari’s assumed office, the NNPC in a letter to Addax Petroleum endorsed by the president and dated September 7, 2015, reversed the agreement entered into by the previous administration.
In the ongoing suit before Justice Olatoregun, the federal government is seeking an order directing the NNPC, Ministry of Petroleum/DPR, and NAPIMS from further allocation of crude oil explored from OMLs 123, 124, 126, and 137 to Addax Petroleum pending when the company furnishes the court verifiable Bank Guarantee from Nigerian banks to cover the monetary claims of the plaintiff.
Other prayers sought by the Nigerian government include an order restraining the NNPC, Petroleum Ministry, and NAPIMS from dealing with Addax Petroleum, as well as stopping them from transferring or assigning their interest in the OMLs to another person.
Also, an order compelling the Nigerian agencies to file an affidavit of fact detailing the company’s assets, properties, and funds.
On Friday, Justice Olatoregun granted an order for the government’s lawyers to serve court papers to the NNPC, the third respondent in the suit, whose office is situated in Abuja, outside the court’s jurisdiction.
She thereafter adjourned the suit till May 3, 2018.
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We’ll Drive Tinubu’s Vision in Rivers With Vigour – Fubara …Inaugurates Dualized Ahoada/Omoku Road ….Debunks Rift With RSHA
Rivers State Governor, Sir Siminalayi Fubara, has stated that he will lead Rivers people to galvanize support for President Bola Tinubu to drive the vision and objectives of the Renewed Hope Agenda in the State with vigour.
The governor, who joined the ruling All Progressives Congress (APC), on Tuesday, explained that his decision to join the APC was not for personal interest but for the overall benefit of Rivers State.
Fubara disclosed these while inaugurating the extension of the dualized Ahoada/ Omoku Express road in Ahoada East and Ogba Egbema Ndoni Local Government Areas of Rivers State.
He commended the contracting firm, Julius Berger, for timely delivery of the project, saying the project is a campaign promise fulfilled which will bring economic benefits to the people and tackle issues of insecurity associated with the route.
He said his administration has remained focused in delivering democratic dividends in the state despite facing glaring challenges.
The governor thanked the people of Ahoada East and Ogba Egbema Ndoni Local Government Areas for their continuous support, and urged his supporters to remain steadfast and also support President Tinubu who he said, has demonstrated love to Rivers State as a father.
Fubara denied having rift with the Rivers State House of Assembly, stating that his meeting with the lawmakers was stalled as a result of delay in the agreed meeting to be convened by former Governor Nyesom Wike and other stakeholders for him to meet with the state lawmakers.
“I have made every effort to meet with the Assembly members, but it is not within my leadership to initiate the meeting process.
“The arrangement was for my leader, Wike, and the elders led by Anabraba to call for a meeting with the the lawmakers.
“I’m a gentleman and principled. I can’t go behind to call them when we’ve already agreed. Whoever that tell them that I don’t want to meet with them, or I rejected proposal meant for them isn’t saying the truth,” Fubara said.
The Permanent Secretary of the Rivers State Ministry Works, Mr Austin Ezekiel-Hart, who gave the project description, said the delivery of the project was a fulfillment of long time dream by the people of Ahoada East and Ogba Egbema Ndoni Local Government Areas.
He said the road was previously a single lane and has now been dualised to 14.6 meters wide, complete with solar-powered streetlights with drainages.
He said the road significantly would reduce travel time between Ahoada and Omoku while improving economic activity in the region.
In his welcome address, Chairman of Ogba-Egbema-Ndoni Local Government Area, Hon. Chuku Shedrack Ogbogu, described the road as a symbol of unity, oneness, and development, thanking the governor for fulfilling his campaign promises.
On his part, the Managing Director of Julius Berger, Engr. Peer Lusbash, said the project was awarded to his company in 2023 with a completion period of 18 months which was achieved in best quality.
He added that Julius Berger enjoyed a good support from the Fubara administration, and assured to complete all ongoing projects being handled by Julius Berger on specification, especially the Ring Road project which is a legacy project.
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Fubara Expresses Commitment To Healthcare …As UNICEF Lauds RSG On Health Programmes
Rivers State, Sir Siminialayi Fubara, has reaffirmed his commitment to ensuring good healthcare for the people of Rivers State.
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?Governor Fubara stated this when he played host to the Country Director of UNICEF, Wafaa Saeed Abdelatef and her management team in Port Harcourt, last Tuesday.
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?The governor who was represented by the Secretary to the State Government, Dr. Benibo Anabraba, said he would continue to provide the necessary facilities in order to ensure accessible and good health care for all Rivers people.
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?”We are constructing new zonal hospitals across the State. The Ahoada Zonal hospital will be commissioned in December and others are near completion.
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?”We are grateful to UNICEF for all they have done and believe we can always work together to care for the vulnerable in the society. We appreciate your physical presence, and believe that your staff working remotely, can also do more virtually. We have a capable Commissioner of Health, Dr. Adaeze Oreh, to help foster our relationship, communication and greater collaboration,” he said.
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?The Country Director for UNICEF Nigeria, Ms. Wafaa Saeed Abdelatef, assured Governor Fubara of UNICEF’s support to the programmes of the State Government. She appealed that health facilities such as the Oxygen Plant at Eleme Local Government Ares and the New Born Care Units be solarized.
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?”Be assured that UNICEF will continue to work and support the programmes here in Rivers State. We have seen the Oxygen Plant at Eleme LGA which has been effective because of the Public Private Partnership. We appeal that the plant be solarized.
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?”I commend your leadership of the State and assure that we are here to support your effort and assure you that you can count on our support and partnership. Rivers State is one of the states we can showcase how things are working so others can learn,” she added.
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News
Dangote Unveils N100bn Education Fund For Nigerian Students
Chairman of the Dangote Group, Alhaji Aliko Dangote, has announced a N100 billion annual education support programme aimed at keeping financially vulnerable Nigerian students in school.
Speaking at the launch of the national scholarship scheme in Lagos, yesterday, Dangote said too many brilliant young people were being forced out of classrooms because of poverty.
He described education as the “strongest engine of social mobility” and a critical foundation for national development.
The initiative, funded by the Aliko Dangote Foundation, will run for ten years beginning in 2026, costing over N1 trillion in total.
Dangote said the scheme would support 45,000 scholars each year at inception, expanding to 155,000 beneficiaries annually by its fourth year, and maintaining that level for the rest of the decade.
By 2036, he said, the programme is expected to have reached at least 1,325,000 students.
“We cannot allow financial hardship to silence the dreams of our young people, not when the future of our nation depends on their skills, resilience and leadership,” he added.
A major component of the fund is the Aliko Dangote STEM Scholars programme, which will provide annual scholarships for 30,000 undergraduate students pursuing science, technology, engineering and mathematics in public universities and polytechnics.
Each beneficiary will receive tuition support aligned with the fees of their institution and course of study. Dangote said the goal is to expand access to higher education, empower innovation, and give young Nigerians the tools to compete globally.
“STEM drives development. If Nigeria must compete globally, our young minds must have the tools to learn, imagine and innovate,” he said.
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