NNPC, NPDC withheld over $21bn, from Federation Account in 14 years – NEITI

The Nigerian Extractive Industries Transparency Initiative (NEITI) believes that the Nigerian Petroleum Development Company (NPDC) and the Nigerian National Petroleum Corporation (NNPC) are withholding $21.8billion and N316billion which should have been remitted to the Federation Account.
NEITI is now urging the Federal Government to retrieve the funds to revitalise the economy and install systems that will guard against abuse of public funds.
NEITI, in its latest policy brief unveiled in Abuja on April 4 stated that the monies include unremitted funds from divested assets to NPDC and legacy liabilities, payments for domestic crude allocation to the NNPC and dividends paid from the country’s investments in the Nigerian Liquefied Natural Gas, (NLNG).
Waziri Adio, executive secretary of NEITI, who disclosed this information on behalf of the agency, urged the Federal Government to retrieve the $15.8billion dividend from the country’s 49 percent stake in NLNG from the years 2000 to 2014.
“Another issue is the legacy liability of NPDC, until we did the 2014 audit report, the NPDC did not tell us that they had liabilities – payments due to the federation and this amounted to $1.4billion and N70bn. Until 2014, we didn’t know about this because they just refused to disclose this,” Waziri said.
NEITI’s findings indicate that there were eight assets under the Shell JV. These are OML’s 4,26, 30,34, 38, 40, 41, 41. Nigeria’s 51 percent stake in these assets was valued at $1.8bn by the DPR when the NNPC divested them to the NPDC between 2010 and 2011.
However PricewaterHouseCoopers, a professional accounting firm, did a study that showed that Shell got $2.7billion for its own 45 percent stake in the assets, whereas Nigeria’s 55 percent stake was valued at $1.8bn.
Worse still, out of that sum, NPDC paid only $100m to the Federation Account, allegedly withholding an outstanding of $1.7bn dollars.
NEITI also finds that all assets under the now JV were  divested to NPDC in 2012. When they were divested, they were not even valued at all and no consideration was paid on them.
“OMLS 60, 61, 62, 63, they were not valued until the third quarter of 2016 and they were valued at $2.2billion, which is still outstanding, says the NEITI report.
“Also on those 12 assets, NAPIMS paid cash call on some of them, amounting to $572million at some point, they realised that those cash calls shouldn’t have been paid. Part of it was refunded, more than $400million dollars to NAPIMS, it was not sent to the Federation Account.
“Also, from domestic crude allocated to  NNPC in 2014, there is outstanding payment of N243bn.
“On the whole, NNPC and its upstream arm, NPDC, are withholding monies that they should have paid, to the tune of $21.7bn and N316billion.
Adio, in an interview with CNBC Africa, monitored by BusinessDay, said the organisation has turned a searchlight on the activities of the  NNPC and its upstream partner, NPDC because these practices contributed to the current recession in the country.
“Government agencies and individuals dipping their hands where they shouldn’t dip, the country is in a bad place now and we need all the money we can get and the country is trying to raise bonds by going to AFDB and also selling assets.
“We believe that there are some monies on the table, owed by these two government agencies that should be recovered and should be used to revitalise the economy.
Adio also said that the system that allows government agencies to wilfully withhold monies that should belong to the federation, should be reformed.
“What NNPC and NPDC have done is clearly against due process and the principles of transparency and accountability and also at odds with the spirit and letter of the Nigerian constitution.
“Section 80 of the Nigerian constitution and sub section 62 of the Nigerian constitution stipulates clearly what should happen to monies that belong to the federation.
NEITI is asking the Federal Government to recover this money and inject it into the economy, retrieve the 12 OMLs divested to NPDC, revalue and auction, so that the country can get better value for these assets.
“We also believe that the relationship between the country and NPDC should be clarified and we also believe we should have investigation into the status and the use of NLNG dividend,” Adio said.
The report has been submitted to the government and the NNPC has said it is studying the report and will provide a response soon.

 

ISAAC ANYAOGU