Furry over $49.8b oil revenue!


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Culled from Daily Independent

Thursday, December 12, 2013

By Chukwudi Nweje  –   Assistant Features Editor

man-of-the-newsLamido Sanusi again?  That must be the question on many lips. In late 2010, the Central Bank of Nigeria (CBN) Governor caused ripples when he said that about 25% of the annual budget was spent on the National Assembly. He was then delivering a lecture entitled, ‘The Future of Nigeria’s Economy’, at the 8th convocation ceremony of the Igbinedion University, Okada, Edo State where he lamented that the Nigerian economy may not meet its Financial Sector Strategy (FSS) 20:2020 target of being one of the 20 largest economies by 2020.

Sanusi is in the news again, tackling the Nigerian National Petroleum Corporation (NNPC) on corruption. In a letter to President Goodluck Jonathan dated September 25, 2013, he accused the NNPC of not remitting revenue from crude oil sales totalling $49.8bn (about N8trillion) representing about 76 per cent of the total crude oil revenues from January 2012 to July 2013, thus contravening extant laws. The letter reads in part: “Our analysis of the value of crude oil export proceeds based on the documentation received from pre-shipment inspectors’ shows that between January 2012 and July 2013, NNPC lifted 594,024,107 barrels of crude valued at $65,332,350,514.57. Out of this amount, NNPC repatriated only $15,528,410,098.77, representing 24 per cent of the value. This means the NNPC is yet to account for, and repatriate to the Federation Account, an amount in excess of $49.804bn of the value of oil lifted in the same period,”

However in a swift reaction, the NNPC has through Omar Farouk Ibrahim, its General Manager, Media Relations Department refuted the position of the CBN governor, saying the apex bank does not understand the workings of the oil and gas industry and the modality for remitting crude oil sales revenue into the federation account. The corporation also faulted the 594.024 million barrels of crude oil given by the CBN as the total crude oil lifting for the period saying rather that the correct figure is 618.55million barrels; “This shows that the CBN understated the actual crude lifting by 4.13 per cent.” It further says proceeds from crude sales are categorised and are statutorily collected by different government agencies, even as they are also paid into separate accounts.  According to the corporation, “Petroleum Profit Tax is collected by the Federal Inland Revenue Service (FIRS), royalty goes to the Department of Petroleum Resources (DPR), third party financing goes for research, development, programme and satellite fields development, while NPDC goes to NPDC for upstream development…While NNPC pays proceeds from equity crude directly to the federation account with the CBN, the FIRS and DPR pay PPT and royalty respectively into the federation account with the CBN.”

Nevertheless, as the CBN and the NNPC trade words, informed analysts wonder who is actually fooling the other, even as they demand a thorough probe into the matter. The demand to probe is coming at a time stakeholders are calling for the unbundling of the NNPC which some analysts see as a cesspool of corruption. As a matter of fact, some analysts argue that most of the illegal activities being perpetuated by the corporation would not have been successful without the connivance of the top management and the Ministry of Petroleum Resources.

They argue that the probe is long overdue because the NNPC is only feeding the public estimates of crude oil lifting in the country because most of the international oil companies (IOCs) have refused to install meters that would tell the exact volume of crude oil produced. Moreover, analysts observe that reconciling the revenue from crude oil sales should not really be a problem because the federation account into which the NNPC pays proceeds from equity crude and the account into which the FIRS and DPR pay PPT and royalty respectively are both domiciled with the CBN.

In the light of this, Debo Adeniran, Executive Chairman Coalition Against Corrupt Leaders (CACOL) reiterated his argument that the NNPC is riddled with corruption insisting that the recent controversy provides new impetus for the anti corruption agencies to probe the activities of the NNPC as well as the Ministry of Petroleum.

Moyo Jaji however attributes the development to triviality on the part of government. “We have jokers in government. If the CBN the chief banker of the Federal Government is kept in the dark about financial transactions of NNPC, the most important parastatal of the nation, thieves will continue to have a field day. Unfortunately, the President appears helpless and hapless to intervene,” he said.

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