Revenue leakages: Chevron in big trouble as reps query oil giant over $15,000 gas flaring fund

THE Adhoc Committee probing alleged revenue leakages in the oil and gas sector between January 2016 to January 2017, yesterday queried claims by Chevron Nigeria Limited that it flared only $15,000 worth of gas in 2016. The committee had demanded for details of all sub-heads payment from the Department of Petroleum Resources, DPR, and also queried the manner gas flaring is measured, who purchased the meter and determined the penalty.

One of the panelists, Rep Johnson Ehiozuwa Agbonayinma (PDP, Edo), who moved the motion necessitating the probe, had pointed out that crude condensates have specified amount of royalty they attract, wondering how Chevron arrived at the $15,000 paid for gas flared in 2016 and if they used meter to measure the quantity of gas flared. Agbonayinma also noted that the DPR accused the IOCs of owing government and also did not have the meter used in measuring gas flared. In his response, Senator Gbenga Aluko, who is the director in charge of Government Relations at Chevron, said that the DPR usually does the measuring and charge the penalties accordingly.

Aluko explained that gas flaring by Chevron has been cut down by 96 percent and whatever amount they have paid on the receipts were all generated by the DPR. “The company is in a 60/40 joint venture with government, and every receipt seen here was given by the DPR”, Senator Aluko said. Agbonayinma questioned him: “You are telling us that you owe only $15,000 of gas flaring penalty and we are saying that how did you determine the quantity of gas you flared and who measured it?’’ He asked if the the Chevron representative would agree with the panel that the $3.5cents being charged by the DPR for condensates production is meagre.

Aluko said he would be happier if the fee could come down than it is, as no business entity likes to lose money. Agbonayinma then suggested that the DPR be asked to submit documents relating to Chevron so as to enable the panel ascertain the veracity of what has been presented. Chairman of the panel, Rep Jarigbe Agom Jarigbe (PDP, Cross River), submitted that the company needs to come with its technical team to answer the questions, adding that since some key documents are not yet available, the committee may be forced to move the public hearing. Vanguard