Falana Demands Recovery of $120bn Oil Funds

Human rights lawyer Femi Falana has called on the Federal Government to recover over $120.5 billion and N66.4 billion allegedly owed by the oil sector.

Human rights lawyer Femi Falana has urged the Attorney-General of the Federation, Lateef Fagbemi, to begin immediate legal action to recover more than $120.5 billion and N66.4 billion said to be owed to the Federal Government by the Nigerian National Petroleum Company Limited (NNPCL), international oil companies and other operators in the oil and gas sector.

In a letter written on behalf of the Alliance on Surviving Covid-19 and Beyond (ASCAB), Falana said court judgments, government investigations and regulatory reports all indicate that the funds, made up of unpaid royalties, taxes, dividends and other revenues, remain outstanding and must be remitted to the Federation Account.

He warned that if the Attorney-General fails to act within 14 days of receiving the letter, ASCAB would approach the court to compel compliance with constitutional and legal obligations.

Falana listed five main categories of funds he believes should be recovered. The largest claim involves about $62 billion in unpaid royalties allegedly owed by international oil companies. He said this stems from the government’s failure to fully enforce provisions of the Deep Offshore and Inland Basin Production Sharing Contracts Act, which requires royalty adjustments when oil prices rise above $20 per barrel.

According to him, this oversight lasted for 18 years and resulted in significant revenue losses. He also referenced a Supreme Court consent judgment from October 20, 2018, which directed the Federal Government to recover these royalties and remit the appropriate share to oil-producing states.

Falana further stated that a committee set up under former Attorney-General Abubakar Malami confirmed the potential recovery of the $62 billion from oil companies, and that several Federal High Court rulings support claims by states such as Akwa Ibom, Rivers and Bayelsa.

He also demanded recovery of around $29 billion linked to crude oil theft and undeclared exports, citing reports suggesting large volumes of oil shipments were not properly accounted for in official records. Falana referenced findings attributed to investigations involving maritime and legislative bodies, which estimated billions of dollars in untracked exports.

In addition, he alleged that NNPCL has not remitted about $21.5 billion in dividends received from its stake in Nigeria LNG Limited (NLNG), despite the funds being due to the Federation Account.

He also pointed to reports by the Nigeria Extractive Industries Transparency Initiative (NEITI), which identified over $6.071 billion and N66.4 billion in outstanding revenues as of June 2024.

Falana criticised the approval of a $2.1 billion external loan by the National Assembly in November 2024, arguing that recovered funds could reduce the need for further borrowing.

He further called for the recovery of about $2.9 billion spent on refinery rehabilitation projects at Port Harcourt, Warri and Kaduna, alleging contractual and operational failures, and urged the EFCC to investigate the matter.

Falana maintained that recovering these funds would significantly boost government revenue and reduce reliance on external debt.

“If the said sum is recovered, the Federal and state governments will avoid further external loans,” he stated.

He also indicated that ASCAB is prepared to pursue legal action if necessary, citing its role in previous advocacy on contract law reforms.

As of now, neither the Office of the Attorney-General nor the NNPCL has publicly responded to the allegations and demands.

What impact could the recovery of such large sums have on Nigeria’s economy and public finances?