OrderPaperToday – State-owned Nigerian National Petroleum Corporation (NNPC) has claimed that the country owes it N797bn.
The claim is contained in a pilot study by Nigeria Extractive Industries Transparency Initiative (NEITI) that focuses exclusively and extensively on the sale of Nigeria’s share of crude oil and gas produced in 2017.
According to the report titled ““pilot study on commodity trading for 2017”, N77.92 billion was under-remitted by NNPC to the Federation Account from Domestic Crude Allocation in 2017.
However, NNPC acknowledged the under-remittance and stated that there is an ongoing reconciliation to net off the N77.92 billion from “the established Federation indebtedness to the Corporation of N797bn arising arising from KPMG Forensic audit of the Corporation at the instance of the Federation.”
In a press release in Abuja, NEITI noted that the 136-page report contains “a treasure trove of information” including breakdown and analysis of oil and gas production in 2017.
It also disaggregated the federation share of production by types, allocation, uses, details of the revenues derived from the sales, the receiving accounts, and allocation of the revenues.
The study also contains details of the buyers’ selection process, the names of buyers/traders of Nigeria’s crude, destinations of the crude, the vessels details, bill of laden dates, pricing options, sale prices and actual payments, payment dates, products supplied by type, cargo, supplier, supply date, volume, unit cost, demurrage and so on.
“Resource-rich countries receive shares of minerals produced in their territories as equity shares or as in-kind payments, and these minerals are usually sold directly or indirectly to commodity traders through state-owned enterprises.
“However, the process and details of these sales are mostly shrouded in secrecy, even when more than half of the revenues from the extractive sector come from these sales. This is why the EITI resolved to beam more search-light on commodity trading. Nigeria is one of the five EITI-implementing countries selected to pilot this enhanced focus,” the Executive Secretary of NEITI, Waziri Adio stated while releasing the report.
Furthermore, the report showed that total crude oil production for 2017 was 692 million barrels. From this volume, the share that went to the federation was 240.9 million barrels representing 35% of the total crude oil production for the year 2017. A trend analysis indicated that the 2017 federation share was 4% higher than the 231.6 million barrels in the same category for 2016 but was 19% lower than the 297.8 million barrels for 2015. This means that while there was a slight improvement on the figure for 2016 (a year plagued by vandalism and sabotage of oil facilities), crude production for 2017 was about a fifth less than the 2015 level.
The study which was conducted by BDO, an international auditing and advisory firm covered four government agencies and 73 companies. The 73 companies included 6 bilateral companies, 13 international trading companies, 4 trading arms of international oil companies, 25 Nigerian trading companies, 2 NNPC trading companies, 9 refineries, and 14 DSDP contractors.