Blog Details

• Alleges underreporting after 1,000-well verification, wants probe 

•Proposes boundary review, possible amendments to Petroleum Industry Act  

•C’River to return as littoral state

Wale Igbintade

A high-level inter-agency committee set up by the Revenue Mobilisation Allocation and Fiscal Commission (RMAFC) has recommended that the federal government declare a state of emergency in Nigeria’s oil and gas sector, order a forensic audit of crude oil production dating back to 2004, and enforce sweeping revenue adjustments among oil-producing states following the verification of more than 1,000 oil and gas wells across the Niger Delta.

The recommendations are contained in the January 2026 report of the Inter-Agency Technical Committee (IATC) on the verification of crude oil and gas well coordinates of disputed and newly drilled fields between 2017 and December 2025.

The committee, inaugurated in June 2025, comprised representatives of RMAFC, the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), the National Boundary Commission (NBC), and the Office of the Surveyor-General of the Federation (OSGoF).

It was mandated to physically verify wellhead coordinates, onshore, offshore and in creeks—accurately plot them on approved maps, and resolve disputes affecting the 13 per cent derivation payable to oil-producing states under the 1999 Constitution.

In one of its most far-reaching recommendations, the committee urged the President to consider declaring a state of emergency in the oil and gas sector to curb criminal activities by operators, address security challenges in offshore operations, and restore regulatory discipline.

It also recommended the establishment of a team of inquiry into crude oil production underreporting and accounting practices by oil companies, alongside the immediate metering of all crude oil and gas flow stations nationwide.

Most significantly, the committee called for a forensic audit of crude oil and gas production from 2004 to date, spanning more than two decades of output and revenue remittances into the Federation Account.

If approved, the audit could have profound financial implications for oil companies, regulators and the three tiers of government, particularly if discrepancies are uncovered in production reporting or derivation payments.

The IATC said it verified and attributed hundreds of wells across nine oil-producing states. Rivers State recorded 195 wells, Delta State 171, Imo State 169, Ondo State 138, Cross River and Akwa Ibom 119 each, Bayelsa 92, Edo 29 and Anambra 25.

The exercise also identified several new oil and gas fields and addressed long-standing disputes over “straddled wells” located near or across state boundaries.

Security for the field verification was provided by the Nigerian Army and the Nigerian Navy, underscoring the sensitivity of the operation.

One of the most politically sensitive outcomes of the report was its recommendation for inter-state revenue adjustments and refunds of derivation payments.

The committee directed that 107 disputed wells in OMLs 70 and 100 be shared equally between Akwa Ibom and Rivers States, with Akwa Ibom required to refund 50 per cent of derivation arrears to Rivers.

It further recommended that Delta State refund portions of derivation to Edo and Ondo States in respect of specific fields, while Akwa Ibom was to refund Cross River for derivation previously received on certain wells.

Bayelsa and Imo States are also to refund derivation payments to Rivers State for identified fields. In addition, several wells between Anambra and Delta States are to be shared equally pending final boundary determination, with corresponding revenue adjustments.

These recommendations could trigger significant fiscal recalculations among oil-producing states, potentially affecting monthly allocations from the Federation Account and straining political relations among governors.