Oil and gas stakeholders differ over payment of dividend from NLNG to federation account

Oi l and gas stakeholders in Nigeria are divided over the request by the country’s 36 governors that dividends from the Nigeria Liquefied Natural Gas Limited (NLNG) accruing to to the Federal Government through the Nigerian National Petroleum Corporation (NNPC) be remitted into the  federation account.

While some of the stakeholders say the governors are right, others are querrying the rationale of the request, saying many of the governors have displayed financial recklessness and poor priorities over time.

This group of stakeholders insist that the money is a strategic asset that should be carefully deployed to build further investment with the economy, rather than sharing and wasting it on frivolous pursuits.

The NNPC, they say, is just representing the interest of government in the Nigeria LNG.

They further add that the Federal Government invested in the project and therefore the returns from the investment should not be put into the federation account.

Chambers Oyibo, former group managing director, NNPC, said the money cannot be paid into the federation account because it belongs to the Federal Government, which invested its own money in the Nigeria LNG.

Oyibo says the NNPC is just holding the government’s share in the NLNG and the Federal Government can decide what to do with its money.

The dividend, he says, is the revenue realised from processed gas.

Another industry operator, who worked in NLNG before he retired, condemns the action of the governors, whom he said, are very reckless in terms of financial transactions.

He says the money is a strategic asset that should be reinvested in LNG expansion, wondering why the governors are blackmailing the Federal Government to share it.

“As far as I am concerned, the money the governors are supposed to use for salaries in their states were diverted for election purposes and it would be unreasonable for them to start demanding for the money accruing from the NLNG to the Federal Government, so that they can waste it again,” he says.

Effiom Edet, chairman, Power Sector Group, and a former staff of Shell Petroleum Development Company, says by law all revenues made by the NNPC are supposed to go to the federation account and not to be kept by the organisation.

Edet further says that since the dividends from the Nigeria LNG is the share of the NNPC, because it is a shareholder, the revenue should
go to the federation account.

He says it is wrong for the NNPC to keep the revenues it is making, instead of putting them in the federation account, saying “the NNPC is supposed to first of all remit its revenue to the federation account and make a budget for its expenses, so that them needed fund would be made available for its operations.”

The governors had during their meeting with President Muhammadu Buhari, while requesting for a bailout from their financial distress, tabled it before him as one of the revenue sources they could benefit from, if it was paid into the federation account.

OLUSOLA BELLO