Nigeria: Blessed are not the tax dodgers; multinational oil companies wanting to pay less tax have merged their operations, but the Nigerian government says no, not here.

Author:Lokongo, Antoine
Position:For the Record - Brief Article

Is globalisation harmful or helpful to African national interests? The answer could lie in the current tussle between the Nigerian government and six multinational oil companies who have combined their operations in order to pay less tax to Nigeria.

The six oil firms -- Chevron Nigeria Limited, Texaco Overseas Petroleum Company (Nigeria) Unlimited, Elf Petroleum Nigeria Ltd, Total Upstream Petroleum Nigeria, Mobil Producing Nigerian Unlimited, and Esso Exploration and Production Company Ltd -- dumped their individual registered corporate identities a year ago under the guise of merging their operations in Nigeria so that instead of paying taxes as six entities, they will now pay as three entities. But the Nigerian government says it won't have it.

According to the Lagos-based newspaper, The Guardian, "the government has declared the firms' purported merger illegal and warned the affected companies that they would lose their existing oil fields unless they obeyed the laws of Nigeria".

An official of the Ministry of Petroleum Resources has said the affected multinationals could only lay claim to their existing oil blocs if they supplied adequate information on their new status and fulfilled all the legal requirements. "The merger of their parent companies overseas does not give them automatic recognition in Nigeria," the official said.

He explained that "the corporate merger placed the Nigerian government at a disadvantage in terms of taxes", adding that the government was not happy that almost a year after the merger was effected, the oil companies had not followed the legal process in Nigeria regarding their new nomenclatures.

But the companies insist that they have a Joint Venture Agreement (JAO) with the government through the Nigerian National Petroluem Company (NNPC).

Currently, the global merger process as practised in Nigeria brings the operations of these companies under restructured outfits that affect taxes and assets with the NNPC.

For instance, Chevron Nigeria Limited and Texaco Overseas Petroleum Company (Nigeria) Unlimited (TOPCON) now operate as Chevron-Texaco as an entity, while Elf Petroleum Nigeria Limited and Total Upstream Petroleum Nigeria operate under TotafinaElf.

Similarly, Mobil Producing Nigerian Unlimited, Esso Exploration and Production Company Ltd (including their sister company in the downstream sector, Mobil Oil Nigeria Plc) have metamorphosed into Exxonmobil.

Nigerian oil ministry officials maintain that...

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