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Nigeria earns $24bn in dividends, revenue from NLNG in 15 years

By on March 18, 2014

Company’s total assets valued at $14bn  Over 4tcf of associated gas captured from flaring
Chineme Okafor in Abuja

The Nigeria Liquefied Natural Gas (NLNG)  at the weekend in Abuja said the country had earned as much as $24 billion in revenue and dividends from its operations in Bonny Island in the last 15 years of its formal existence.

The NLNG explained that of that amount, $13 billion was earned as dividend by the country, while another $11 billion was taken in as revenue on sales of feed gas. It also noted that the country now owns $14 billion worth of Liquefied Natural Gas (LNG) assets on the Bonny Island, adding that the   financial gain of $50 billion has accrued to Nigeria from the meagre investment of $2.5 billion 15 years ago.
The Managing Director of NLNG, Mr.Babs Omotowa, stated this when the company celebrated its 3,000th LNG export cargo in Abuja, stressing  that the country’s decision to embrace the LNG investment has paid off.

He noted that the LNG investment had captured about four trillion cubic feet (tcf) of associated gas that could have been flared in the country, thus reducing gas flaring by upstream oil and gas companies from over 60 per cent to less than 25 per cent so far from its inception.

Omotowa also explained that in terms of the country’s diversification of its revenue base and monetisation of her gas resources, the NLNG has lived up to its founding objectives to impact positively on the country’s gas flaring status.

“One may ask the question whether the vision to monetise our gas resources has been realised. I will answer with a resounding ‘yes’, and please do permit me to explain why.

“On gas flaring, since 1999, over four trillion cubic feet of associated gas which would otherwise have been flared has been captured, thus helping to reduce gas flaring by upstream companies from over 60 per cent to less than 25 per cent. In doing this, the company has positively impacted on the country’s gas flaring status and thus helped to improve the environment,” he said.

Omotowa further stated: “On diversifying the country’s revenue base and monetising gas resource, the fact as available in public records at the Corporate Affairs Commission (CAC) and verified by the Nigeria Extractive Industries Transparency Initiative (NEITI) speaks for itself.

Nigeria now owns $14 billion of assets on Bonny Island; the country has earned $13 billion in dividends, another $11 billion earned in feed gas sales revenue, over $10 billion expenditure in local economy on goods, services and salaries of thousands of staff employed.

“Corporate income tax will exceed N220 billion per annum, by far the highest in Nigeria and Sub-Sahara Africa. Rivers State government earns over N6 billion per annum from personal income taxes, Bonny local government over N88 million yearly as tenement rate.

Truly, the decision of NLNG’s founding fathers has indeed created wealth from a previously wasted resource,” he added.

Speaking further, Omotowa asked: “Who would have imagined that all these gains of over $50 billion would come to Nigeria within 15 years from a meagre $2.5 billion invested? Also important, the take of Nigeria from NLNG revenue is now over 70 per cent, comprising the 49 per cent dividend, 30 per cent corporate income tax and other taxes; this is a classic story of the mustard seed that grew into an oak. Truly, our story is stranger than fiction.”

Omotowa also talked about unprecedented criticism of the comfort law and tax holiday granted to the NLNG by the government. He explained that other countries like Oman, Angola, Trinidad and Tobago as well as Qatar with LNG projects have similar stabilisation clauses and 10 to 12 years corporate tax holiday.
He asked that similar concessions be granted to other upcoming LNG projects in the country such as Brass LNG Limited and OK LNG Limited to put them on stream quickly.

“They have stayed long enough on the drawing boards. These are struggling LNG companies that need help and we should not allow them to die or to go through a 35 year cycle on the drawing board. Nigeria urgently needs the fortune these companies will bring in jobs and revenue,” Omotowa explained.

 

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