NEITI calls for probe of $15.8 billion NLNG dividends from 2004 to 2014

Waziri Adio

The Nigeria Extractive Industries Transparency Initiative, NEITI, on Thursday asked the Federal Government and the National Assembly to launch an independent probe to determine the current status of all dividends and loan repayments by the Nigeria Liquefied Natural Gas, NLNG, to the Nigerian National Petroleum Corporation, NNPC between 2000 and 2014.

The Executive Secretary of the transparency and accountability agency, Waziri Adio, said in Abuja that government must also investigate where the funds were, or what projects they were utilized on.

This is the second call by NEITI on government for a probe of some public finances in the last 48 hours since the publication of the latest edition of NEITI’s Policy Brief, which examined unremitted funds, economic recovery and oil sector reforms.

In its previous statement on Tuesday, NEITI also asked the federal government to recover a total of $21.8 billion (about N7.6 trillion) and N316.074 billion from the NNPC, being alleged unremitted revenues realised from the divestment of some federation asset by some multi-national joint venture oil and gas companies to its upstream subsidiary, the National Petroleum Development Company, NPDC.

The amount also included NPDC’s legacy liabilities and payments for domestic crude allocation to NNPC.

Mr. Adio noted that although the federal government’s 49 per cent equity in the NLNG was held through the NNPC, dividends were paid annually, but were not being remitted to the federation account as and when due.

“NEITI’s audits have revealed that until 2015, NNPC failed to remit the interests and dividends from NLNG to the Federation Account,’’ the NEITI scribe said.

“Total outstanding dividends and loan repayments by NLNG to NNPC not remitted to the Federation Account between 2000 and 2014 stands at over $15.8billion.

Details of the outstanding unremitted funds included $211.34 million in 2000; $322.08 million in 2001; $226.6 million in 2002; $436.3 million in 2003; $280.1 million in 2004; $2073 million in 2005; $333 million in 2006 and $843 million in 2007.

Similarly, about $2.6 billion was paid in 2008; $879.84 million in 2009; $1.43 billion in 2010; $2.54 billion in 2011; $2.8 billion in 2012; $1.3 billion in 2013 and $1.42 billion in 2014.

Mr. Adio said NEITI’s independent auditors had traced these payments to NNPC accounts without a corresponding evidence NNPC remitted same to the Federation Account as required by sections 80(1) & 162 (1) of the Nigerian constitution.

On domestic crude allocation and management, the NEITI Executive Secretary raised concerns about earnings from daily allocations of 445,000 barrels of crude oil for domestic refining, which the NNPC did not properly account for.

Despite the refineries operating at below full capacity for a long time, and currently processing less than 100,000 barrels per day, NEITI said between January 2015 and September 2016, NNPC lifted a total of 245.4 million barrels of crude oil for domestic refining.

The transparency agency said of this volume, only 24.7 million barrels were delivered to the refineries, representing a paltry 10.06 per cent of the total crude oil lifted for domestic refining for that period.

The remainder of the allocation, it pointed out, was exported through a variety of channels.

They included 64.8 million barrels, or 26.4 per cent exported directly; 97.6 million barrels, or 39.77 per cent sold under the Offshore Processing Agreements, OPA, and 58.29 million barrels, or 23.75 per cent sold under the Direct Sales- Direct Purchase (DSDP) scheme.

NEITI said concerns highlighted through its various audits and other interest groups about the inefficiency of the various crude oil supply arrangements, especially the OPA, led to the discontinuation of the OPA in April 2016.

“NEITI audits have shown that earnings from transactions arising from domestic crude allocations have not been fully remitted to the country’s treasury,” NEITI said. “Between January 2012 and July 2013, total revenue for domestic crude sales was $28,215,731,691, but NNPC only remitted $14,542,654,329.’’

Mr. Adio wants the federal government to recover the balance of over $14.5 million so far disclosed in NEITI reports, and urgently consider reviewing these arrangements to avoid huge revenue losses and leakages.


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