Nembe says EFCC recovered pipeline fees owed to JV

Nembe Exploration and Production Company Limited has defended its role in the recovery of outstanding oil pipeline transportation fees by the Economic and Financial Crimes Commission, saying the recovered money belonged to its joint venture with the Nigerian National Petroleum Company Limited.

The company, formerly known as Aiteo Eastern Exploration and Production Company Limited, said it operated the Nembe Creek Trunkline (NCTL) and provided crude oil transportation services to third-party operators, including Newcross Exploration and Production Limited.

In a statement issued on Friday, Nembe said some users of the pipeline accumulated unpaid transportation charges, which it had been trying to recover on behalf of the joint venture.

It explained that crude oil theft, pipeline vandalism, insecurity and disruptions during the COVID-19 pandemic had affected operations and made it difficult to reconcile the volumes transported by individual operators.

The company said it had issued payment demands, sent correspondence and engaged the affected pipeline users before the EFCC intervened.

“The EFCC’s subsequent intervention brought its statutory investigative and recovery powers to bear on the outstanding obligations,” the statement said.

Nembe stressed that the intervention was aimed at recovering money owed to the joint venture, not funds belonging to the company.

“Nembe was the operator responsible for pursuing the outstanding payments on behalf of the JV, not the defaulting party in the underlying transactions,” it added.

The clarification followed the EFCC's announcement that it had recovered $3m and N1.303bn from Aiteo Exploration and Production Limited and Newcross Exploration and Production Limited over outstanding statutory payments to the Federation.

The commission said its investigation followed a petition alleging the non-remittance of revenues from stamp duties and pipeline transportation fees relating to several oil facilities between 2010 and 2019.

According to the EFCC, Aiteo failed to remit $38.43m in stamp duty arising from its acquisition of Oil Mining Lease 29 and the Nembe Creek Trunkline, while Newcross was found to have outstanding crude oil transportation fees of $22.84m for using the pipeline.

The commission said the companies acknowledged their respective liabilities and made payments into recovery accounts domiciled with the Central Bank of Nigeria.

The recovered funds were subsequently handed over to the Revenue Mobilisation Allocation and Fiscal Commission by the EFCC's Lagos Zonal Directorate 2 on November 10.

Nembe, however, said the pipeline transportation fees and the stamp duty issue were separate matters.

It disclosed that the stamp duty obligation relating to the acquisition of OML 29 and the NCTL remained under reconciliation with relevant statutory authorities.

The company said discussions were ongoing to establish the applicable obligations and amounts, insisting that the issue should not be linked to the recovery of transportation fees.

It welcomed the EFCC's recovery of the outstanding pipeline revenues, describing the funds as payments due to its joint venture for services already provided.

The company expressed hope that subsequent reports would reflect its position as the pipeline operator responsible for pursuing the outstanding payments rather than a defaulting party.