NPDC: Reps to set up Ad-hoc Committee on $1.5bn revenue loss

The House of Representatives at the Wednesday plenary  resolved to set up an Ad-hoc Committees that will investigate over $1.5 billion crude oil revenue alleged lost by Nigerian Petroleum Development Company (NPDC).

The resolution was passed following the adoption of the motion on the “alleged infractions in the operations and activities of NPDC, the persisting lack of capacity and attendant revenue losses to Nigeria,” sponsored by Ahmed Abu (APC-Niger).

The proponent of the motion, observed that the Company which was established in 1988 as a wholly owned subsidiary of Nigerian National Petroleum Corporation (NNPC) with the mandate to participate in petroleum exploration and production activities, currently owns and operates several oil and gas fields and infrastructure in the Niger Delta region.

“Apart from creating an additional source of revenue for the country, the NPDC was established to also develop Nigeria’s local capacity in the industry to enable sustainable development and profitability but allegations of unethical and questionable actions by the company appear to be hindering the attainment of those objectives.

“The House is concerned that 20 years after its establishment, the NPDC still appears to lack the capacity to compete favourably in the oil and gas industry and is reported to be consistently seeing its core activities to third party private entities without due procurement process in strategic alliance agreements that involve the provision of funds by those entities to carry out exploration and production activities on almost all the company’s oil fields including the lifting of crude on behalf of the company.”

According to him, the inadequate capacity of NPDC, also affects the reconciliation of revenue generated and the amount of crude lifted, leading to speculations of about a loss of over $1.5 billion of revenue to the Federal Government.

“The House is also concerned about allegations that most of those third party entities are newly registered companies with little or no technical experience of financial capability to carry out or meet the terms of those strategic alliance agreements but are owned by cronies of members of NPDC management and other interested parties and are consequently allowed access to funds obtained by NPDC from government appropriation to their benefits.

“The House is cognizant of other reports that the nation is losing billions of naira daily from the outrageously inflated recurring expenditure on the operations of the NPDC with examples of areas like diesel (AGO) supply where the management selects preferred suppliers and approve payment for quantities of diesel far more than the actual requirements and regular pipe supply contracts also awarded to preferred suppliers.

“All without due process and also of possible evasion of statutory obligations by the NPDC with regard to royalties and tax required to be paid to the government,” the Niger state lawmaker alleged.

To this end, the Ad-hoc Committee when constituted is to investigate all the allegations against NPDC including other related issues and report back to the House within six weeks.

In a related development, the House Committee on Public Petitions during an investigative hearing mandated NPDC to pay the Ikara Community in Edo State total sum of N100 million as compensation for a perenial oil spill, estimated at about 100 barrels of crude oil, since 2014.

Prior to the invetsigative hearing, National Oil Spill Detection and Response Agency (NOSDRA) had issued a 14-day ultimatum to the NPDC to commence the clean up of the community or face sanctions.

Oluwole Adeleke, NOSDRA officer in charge of Impact Assessment Department and Godabe Godabe, who represented NPDC disagreed on the structure of the compensation.

In his presentation, Adeleke stressed the “need to carry out an impact damage assessment first to know how to quantify and determine what to pay.

“I’m a director and we’ve done several in the past and I can’t just come out with an estimate to justify what is on ground,” he stated.

On his part, Lawrence Wilbert, spokesman of Ikara community explained that “the professional assessment carried out on the level of damage to the community was N11.736 billion and this can be verified anywhere by professionals.”

While ruling, Uzoma Nkem-Abonta, chairman, House Committee on Public Petitions who rules him out of order noted that “in the report before us here it was admitted that it was due to equipment failure and to be specific it was four equipment failure so what assessment do you need to know about before tying a figure to it.