GMD, NNPCL, Mele Kyari
By Our Reporter
Top management staff of the Nigerian National Petroleum Company (NNPC) are currently running from pillar to post to ensure the reconciliation of its financial records on alleged indebtedness to the Federation.
To this end, the NNPC Limited says it is collaborating with Nigeria Extractive Industries Transparency Initiative (NEITI) and all relevant stakeholders in the reconciliation panel set up by President Bola Tinubu to investigate, review and reconcile the financial records on alleged indebtedness to the Federation by both NNPC and Federation Accounts Allocation Committee (FAAC).
NNPC’s Chief Corporate Communications Officer, Olufemi Soneye, said so amid calls by a civic group for a probe of several monies allegedly owed to the federation by the national oil company.
NEITI’s 2021 audit reports for the oil and gas industry revealed that Nigeria earned a total of $741.48 billion in 21 years, between 1999 and 2020. The reports also disclosed that the country earned N635.3 billion from the solid minerals sectors between 2006 and 2020.
Executive Secretary of NEITI, Ogbonnaya Orji, announced this at a stakeholders’ roundtable organised by the agency in Abuja for the review and approval of its 2021 Audit Reports for the oil, gas and solid minerals sectors, which were submitted to the agency by the independent administrators, Messrs Taju Audu & Co, and Amedu Onekpe & Co
Orji said NEITI also conducted a total of 13 cycles of reconciliatory reports in the oil and gas sector and 11 cycles of reports in the solid minerals sector.
“These reports have disclosed a total revenue earnings to the government of $741.48 billion from the oil and gas sector and N635.3 billion from the solid minerals sector.
“These earnings were between the years 1999-2020 (oil and gas) and 2006-2020 (solid minerals sector earnings). In addition, NEITI reports have disclosed that Nigeria lost over 619.7 million barrels of crude oil valued at $46.16 billion or N16.25 trillion from 2009 to 2020 from theft and sabotage.
“This amounts to losing over 140,000 barrels of crude valued at $10.7 million daily. Furthermore, NEITI has reported on subsidy payments from the years 2005 to 2021 and its huge negative consequences to the nation”, Orji said.
Continuing, the NEITI chief said in the reports, it was revealed that Nigeria had spent $74.39 billion, which translates to N13.7 trillion. By these figures, Nigeria spent an average of N805.7 billion annually, N67.1 billion monthly or N2.2 billion daily.
On the 2021 NEITI Industry reports of the oil, gas and mining industries, Orji said they covered a total of 69 companies and 12 government agencies, with one state-owned enterprise for the oil and gas report, pointing out that a total of 1,214 companies with three government agencies were covered in the report of the solid minerals sector.
According to him, “the objectives of the reports were to establish the quantities of minerals produced and utilised in the country. The reports also sought to establish the revenue paid by oil, gas and mining companies and how much of such revenues were actually received into government coffers.
“Other areas of focus by NEITI are to identify investments made by the Federation or the Federal Government in the oil, gas and mining industries, track subsidy payments, company remittances and liabilities.”
Apparently shaken by the reports, Civil Society Legislative Advocacy Centre (CISLAC) has been calling for immediate government action in response to the disturbing revelations by NEITI’s 2021 Oil and Gas Industry Audit Report.
CISLAC’s Executive Director, Auwal Musa Rafsanjani, said the report uncovered critical issues within the country’s oil and gas sector that demanded prompt attention to ensure transparency, accountability and national development.
Rafsanjani, who also heads Nigeria’s wing of Transparency International, maintains that the document highlighted a decline in the country’s ranking in the 2021 global corruption perception index, prompting concerns about oversight of the nation’s shared assets by the relevant authorities.
He has been urging the government to investigate and sanction culpable public officials, who reportedly received almost $80 million alleged bribes from Glencore, a multinational mining and commodity trading company.
According to him, despite Glencore facing repercussions for bribery, public officials, on the receiving end, have not faced any consequence, hence “CISLAC points to the over $1.00 billion paid in bribes by Eni and Royal Dutch Shell for the rights to the OPL 245 offshore oilfield to members of former President Goodluck Jonathan’s administration.”
He noted that the “questionable deal could cost Nigeria as much as $5.00 billion due to poorly negotiated fiscal terms, in addition to the $1.1 billion already lost due to corrupt payments, as outlined by Italian prosecutors.”
Continuing, CISLAC says the audit findings reveal alarming losses in crude oil due to theft, sabotage and measurement errors, along with significant expenditures on petrol subsidies and quasi-fiscal items.
“Moreover, the report sheds light on unremitted or under-remitted federation revenues, misapplication of the 13% derivation principle, issues related to the Petroleum Industry Act (PIA), sector governance, and concerns regarding crude oil and gas barter arrangements.
“CISLAC is calling for immediate action, utilising the legal and regulatory framework provided by the Petroleum Industry Act (PIA) to mobilise civil society for advocacy, public debates, and vigilant monitoring of sector reforms.
“The organisation advocates for the simplification and widespread dissemination of the report’s key findings to enhance public awareness and drive demand for transparency and accountability.”
However, NNPC is stating that the claims by the civic group were baseless, considering the fact that NEITI itself had dismissed many of the allegations in the said 2021 report, following a series of engagements with it, that is NNPC.
“NNPC states that at the outset of President Tinubu’s administration, it was made to sell Premium Motor Spirit (PMS) imported into the country at one third of its value, a development that gave rise to an average of N400 billion monthly subsidy bill, which subsequently put a strain on its revenues and finances.
“NNPC further states that, “that subsidy bill accumulated to N3.736 trillion as of May 31, 2023. With respect to gas-to-power debts, the non-payment of NNPC’s share of upstream joint venture gas supplied to the government-owned plants had led to the accumulation of indebtedness of N174.07 billion by the federation.
“Similarly, the receivables due from the federation to NNPC Exploration & Production Limited (NEPL) as of May 31, 2023 amount to $712 million (equivalent to N309.07 billion at N434.08/US$1) for revenues not remitted to NEPL but paid into the Federation account.
“While the federation owed NNPC the sum of N 4.207 trillion as net indebtedness, the company was only indebted to the federation in the sum of N2.852 trillion, made up mainly of outstanding Good and Valuable Consideration (GVC) in respect of government upstream divestments, royalties and Petroleum Profit taxes (PPT).
“We would like to also take this opportunity to clarify that over the years, our relationship with NEITI has been very cordial, as seen in August 2020 when we became an EITI supporting company in 2020, joining a group of over 65 extractives companies, state-owned enterprises (SOEs), commodity traders, financial institutions and industry partners committed to observing the EITI supporting company expectations.
“Indeed, aside being a signatory to several EITI’s global ethics and standards, NNPC Ltd had on the sidelines of the United Nations General Assembly (UNGA) in Washington DC, in September this year, signed up to the United Nations Global Compact on human rights, labour, environment, and anti-corruption, thereby becoming the first state-owned oil company to join the global initiative.
“NNPC’s book remains open to all our stakeholders as we remain committed to delivering value to Nigerians with integrity and as espoused in our principles of Transparency, Accountability and Performance Excellence (TAPE), the bulwark of the Mele Kyari leadership of the company”, said Soneye
