$13bn NLNG dividends: NNPC faults NEITI report

The Nigerian National Petroleum Corporation (NNPC) has denied the claim by the 2013 audit report carried out by Nigeria Industries Transparency Initiative (NEITI) claiming that it failed to remit $13 billion revenue accrued from NLNG.

“Before now, the position is that the NLNG belongs to the Federal Government and the NNPC is an arm of the Federal Government. The NLNG dividends are there and if there is any kobo that goes out of it, it was done with the approval of the Federal Government. No kobo leaves the NLNG dividend without appropriate approval.

“Part of the spending for NLNG dividends was the development of NLNG trains, Brass LNG and Olokola LNG and it is not right for anybody to say the money is now missing. And with the current regime who says the NLNG belongs to the federation, the balance of the NLNG money has been move over to the CBN. The money is not with the NNPC,” said Godwin Okwonkwo, head debt management of NNPC on Tuesday in Abuja at a stakeholder’s dialogue to discuss findings of the 2013 audit report on oil and gas and solid minerals.

“Any amount removed from the funds was done with appropriate approval; like funding of the trains in the NLNG, the Brass and Olokola LNG projects and other gas related projects. The balance of that we transferred through the TSA to the CBN. Nothing leaves there without appropriate approval. NNPC is not an unorganized place where people do things anyhow”, Okwonkwo insisted.

Going forward he said, “NPDC is being reorganised into an asset management teams, to ensure that it starts afresh to operate better than its peers in the industry and begin to make money, not only for NNPC, but to put NNPC in the position to declare dividends to the federation”.

Waziri Adio, executive secretary of NEITI, while presenting the highlights of the report said the confusion on whether the NLNG belongs to the Federal Government or the Nigerian Petroleum Development Company (NPDC) has resulted to a situation where the NPDC enjoys all the proceeds of the assets without remitting anything to the federation.

According to the recommendations of the report, there is need for NNPC, DPR, FIRS, OAGF and CBN to prioritize fixing remedial issues identified in their operation, Adio suggested as a way of avoiding the huge loss of revenue from NNPC and other organisations.

There should be an investigation into the divestments of federation assets by NNPC to NDPC. Pricing methodology should be resolved through the enactment of appropriate law to forestall under assessment of Petroleum Profit Tax (PPT) and royalties, gas should be invoiced in dollars, not naira to avoid exchange losses as well as NNPC refunding the outstanding revenues owed, read some of the recommendations of the report as a means of avoiding revenue loss.

The NNPC representative maintained that cash call is the first line charge from the revenue derived from export sales. When you receive your revenue, you pay cash calls else there would be no production. So first line charge out of the revenue is cash call, he said.

But stakeholders at the dialogue were convinced that the security agencies should have commenced prosecution of organisations found culpable by the report.

“We expect that security agencies represented here should have told us how far they have gone with prosecting organisations found culpable or what they are doing to ensure that the funds are returned, said Otive Igbuzor, executive director, African Centre for Leadership Strategy and Development.

Timeliness of NEITI report has been a concern to expert who say the report as been belated. As a board, we have resolved to seek necessary support to make the reports more regular as well as generate other knowledge products to keep issues of transparency and accountability on the front burner for policy makers and citizens alike, enthused Kayode Fayemi, NEITI board chairman.

Represented by Lawan Garba, member national working group of NEITI, representing north east, the chairman explained that the report was necessary as it aimed at tackling the challenges of resource curse in resource rich nations like Nigeria.

“Resource curse afflicts a country when the abundance of natural resource creates a negative incentive to concentrate economic activity on the exploitation of minerals at the expense of productive sectors”.

 

KENNETH AZAHAN