• Thursday, May 23, 2024
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FAAC queries NNPC over $55m NLNG dividend

NNPC withheld $16.8billion NLNG dividend due FG in 16 years

The Federation Account Allocation Committee (FAAC) has initiated an investigation to determine what the Nigerian National Petroleum Corporation (NNPC) Limited did with some Nigerian Liquified Natural Gas (NLNG) profits.

An ad hoc committee is now analysing and comparing amounts owed for subsidies, taxes, royalties, and other payments with amounts received or paid thus far.

According to the FAAC post mortem subcommittee report for August, the NLNG paid a dividend of $275 million.

The state-owned company said that $220 million of the whole payout was utilised to pay off the nation’s obligation on subsidy, accounting for 80 percent of the total dividend.

Read also: 42% of Nigeria’s 2021 oil proceeds unavailable for federation

However, NNPC withheld $55 million, or 20 percent of what should have been paid into the nation’s coffers, which the committee deemed unlawful.

The Ad-hoc Committee held its first meeting on July 26 to discuss the terms of reference. Following that, the Sub-Committee wrote to NNPC, demanding information on dividends earned from NLNG activities from conception to the present. NNPC has yet to respond to the Sub-Committee.

The Ad-hoc Committee held its first meeting on July 26th to discuss the terms of reference. Following that, the Sub-Committee wrote to NNPC, demanding information on dividends earned from NLNG activities from conception to the present. NNPC has yet to respond to the Sub-Committee.

In July, it was discovered that the NNPC Production Sharing Contracts (PSC) petroleum Oil lifting was at 1.45 million barrels for both export and domestic petroleum, which is 9.02 percent more than the 1.33 million barrels recorded last month.

Under the PSC Profit Crude and Gas Receipt and Distribution, crude oil export revenue was $17.75 million in July, while domestic PSC crude oil and gas receipt was N65.53 billion.

The Federation Share, which is 40 percent of PSC profits totaling $7.10 million and N26.21 billion, was deposited to the Federation Account and distributed in August.

Read also: Despite lawmakers’ intervention, unremitted income from oil sales rises to $9.85bn – NEITI

Aside from the $55 million, $5.33 million and N19.66 billion were sent to NNPC Ltd as management fees “being 30 percent share of PSC Profit in accordance with Petroleum Industry Act (PIA),” according to the report.

In accordance with the PIA, $5.33 million and N19.66 billion were delivered to Frontier Exploration Funds (FEF), representing a 30 percent share of PSC profit.

In accordance with PIA, $5.33 million and N19.66 billion were delivered to Frontier Exploration Funds (FEF), representing a 30 percent share of PSC profit.

The PIA established FEF to give financial support for the discovery and development of new areas for hydrocarbons such as oil and gas that have not yet been explored or where exploration has been limited. The FEF’s target areas include Anambra, Bida, Sokoto, Chad, and Benue.

During the FAAC meeting in August, significant financial information about dividends that would be credited to the Federation Account in Nigeria was also disclosed. The NNPC Ltd, in particular, declared an estimated interim dividend payment of N81.17 billion to be disbursed to the Federation Account.

This dividend payment is a portion of NNPC Ltd’s revenues or earnings that will be transferred to the Nigerian government for the benefit of the Federation Account.

In addition, it was disclosed that the NLNG had a $158.17 million dividend payable to the Federation Account.

It was revealed that certain sums of money were being reconciled for domestic products in Nigeria to the Federal Inland Revenue Service and the Nigerian Upstream Petroleum Regulatory Commission (NUPRC).

The first was a total of $109.47 million and N10.02 billion for domestic products, representing Joint Venture (JV) Royalty and PSC Royalty. These royalties were paid to NUPRC by companies active in the Nigerian oil and gas industry.

The second was $28.76 million and N92.51 billion in the process of being reconciled. These figures represent JV and PSC taxes on domestic products.