An oil and gas consultancy firm, Trobell International Limited, has given reasons why it is entitled to a $1.5 billion from the Federal Government as commission.
DAILY NIGERIAN reports that in 2018, the company was engaged by the Office of the Attorney General of the Federation as lead consultant to recover the excess of government’s share from the profits made by oil companies.
The Federal Government, however, suspended its work last month.
But before the suspension, according to a statement by the firm’s managing director, Thomas Sede, the firm has helped the government raked in over $55 billion following out of court settlement with some of the oil firms who initially rushed to court to stop the recovery effort.
Thus, the demand for the recovery charges of 5% of the recovered sum, according to the managing director, was in line with the terms of engagement and the standards in such process.
The company stressed that it crossed several hurdles in its attempt to help the government recoup what is due to it from the profit made by the IOCs under Production Sharing Contracts.
The firm disclosed that it was the first to bring the attention of the government to the possibility of making the recovery at a time the government was struggling with balancing up its finances, following the economic crises witnessed by the early years of the Buhari administration.
“It was out of patriotism that Trobell on 19th January 2017 when Nigeria was in recession and knowing fully well that the contracting oil companies which signed the Production Sharing Contracts (PSCs) are owing Nigeria these colossal sums of money from profit oil, wrote a proposal to the then Honourable Minister of Finance to be appointed a lead consultant to recover the money from the International Oil Companies (IOCs).”
“It is important to note that it was at the time Nigeria went about borrowing through the issuance of Bonds and Treasury Bills for a minimal amount when compared to the large sums of money the country was being owed by these international oil companies.
“When there was no response exactly one year after Trobell’s proposal to the Former Minister of Finance, Trobell again submitted the same proposal on January 19, 2018 to the Honourable Attorney-General of the Federation (HAGF).”
Around this time, three Niger Delta states of Rivers, Akwa Ibom and Bayelsa had also sued the Federal Government seeking that the government be mandated to initiate a process of recovering the said monies from the IOCs in order to have their own shares.
Mr Sede said when the firm was finally engaged it moved to end the legal tussles before taking further steps for recoveries.
“Trobell’s mandate was to identify the PSCs contracting companies that are affected by the non-application of the Production Sharing Act; Section 16 (1) and determine the amount owed by each company.”
To accomplish the task, he said, Trobell engaged “several Senior Advocates of Nigeria (SANs) and one of the best accounting firms in Nigeria. Beside the Petroleum experts nominated to work with Trobell by the plaintiff states, Trobell also engaged its own Petroleum experts”.
Some of the tasks undertaken, according to Mr Sede, include obtaining relevant documents from NNPC, FIRS, Nigerian Customs and other sources (PSC Agreements, Tax Returns etc.), analysis of Crude Oil Price Data (1998-2018), Crude Oil lifting data by PSC Parties over the period of each Oil Mining Lease (OML) production, United States of America Inflation rates (1998-2018) to adjust US$20 to Real Terms – conversion of US$20 of 1998 to US$20 Real Terms over the period.
Additional tasks undertaken by Trobell include the development of Financial Model for the computation of the Additional Revenue & approval of same by the Body and the HAGF, computation of revised Profit Oil distribution between OML operators and NNPC/FGN on the switch of profit-sharing ratios, compilation and Presentation of a comprehensive report to the office of the HAGF showing a detailed summary of amounts due from the various OMLs under the various PSCs
With the approval of the minister of Justice, the firm also sent letters of demand for the amounts computed against the various OMLs were sent out to the various operators and convened a meeting between the body of consultants, the OML Operators (IOCs) and the Federal Ministry of Justice.
The meeting, according to Mr Sede, discussed the basis of the demand notices and how the outstanding amounts of Additional Revenue accruing to the Federation were calculated for each OML, the terms of the mechanism for recovery and modalities for negotiation and for making enquiries and getting responses in respect of the subject matter.