NNPC Didn’t Remit $4.7bn, N318.2bn To Fed Account In 2014- NEITI Report

NNPC Didn’t Remit $4.7bn, N318.2bn To Fed Account In 2014- NEITI Report

The Nigeria Extractive Industries Transparency Initiative (NEITI) on Friday released its oil industry audit reports for 2014, detailing among others how the Nigerian National Petroleum Corporation (NNPC) and its production arm- the Nigerian Petroleum Development Company became government onto themselves, disregarding every known law and authority in the country.

The 2014 oil and gas audit, which was conducted by SIAO and Co, a Nigerian accounting and auditing firm, noted that a total of $4.7 billion and N318.2 billion that should have gone to the Federation Account were not remitted by Nigerian Petroleum Development Company and its parent company- Nigerian National Petroleum Corporation (NNPC).

The report also said the country earned $55.5 billion from the oil and gas sector and N55.82 billion from the solid minerals sector within the period under review, during which losses from crude-for-product swap and Offshore Processing Arrangements (OPA) amounted to $198.7 million.

The NEITI report also put a figure to the amount spent in the last full fiscal year of then President Goodluck Jonathan administration, saying a total of N2.5 trillion was paid out as petroleum subsidy in 2013 and 2014, during which the Federal Government frittered away N853.2 billion under its Subsidy Re-investment Programme (SURE-P).

In 2014 also, the country imported a total of 22 billion litres of petroleum products, up from 20 billion litres the year before, while the quantum produced by the nation’s four refineries fell 63.5 per cent from 2.6 billion litres in 2013 to just 950 million litres.

As if these were not enough, the audit showed that by the 2014 year-end, NPDC had not paid the outstanding $1.7 billion for the eight OMLs under the Shell Joint Venture divested to it by NNPC.

“NPDC had also not paid for the four OMLs under the NAOC JV divested to it by NNPC. Those four assets were recently valued by DPR at $2.25 billion; NPDC had sought clarification for the basis of the valuation.

According to the reports, “the total revenue flows for the oil and gas sector fell from $58.07 to $55.5 billion between 2013 and 2014, a decline of about 5%. However, revenue flow for the solid minerals sector in 2014 showed a marked improvement over the previous year, with a 48% rise from the N37.676 billion of 2013 to N55.8 billion in 2014.”

The 2014 Oil and Gas Audit cycle involved 41 oil and gas producing companies that made material payments of $5 million and more to the federation in 2014 and 16 government agencies that received funds on behalf of the federation.

The report said 109 producing assets were active during the year, comprising:  59 Joint Venture (JV) licenses; 26 Sole Risk and Marginal Field Operating (SRMF) licenses; 23 Production Sharing Contract (PSC) licenses; and one Service Contract (SC) license.

Other major highlights of the audit report included N68.28 billion outstanding liabilities from NPDC for PAYE, WHT, EDT, VAT and NDDC Levy were unremitted by NPDC, while $3.3 billion represented outstanding liabilities for Royalty Oil, Royalty Gas, PPT and Gas Flare Penalty.

There was also the shortfall of N250 billion in Remittance to Federation Account by NNPC, even as “the value of crude oil allocated to NNPC for domestic use in 2014 came to $15.67billion or N2.44 trillion. Only N1.36 trillion was received in the year 2014 in respect of domestic crude oil; while the total deduction from domestic crude sales was N830 billion. This therefore leaves an unremitted balance of N250 billion from the domestic crude sales,” the report added.