$49.8 billion Crude Oil Revenue Is Not Missing — Sanusi

Lamido Sanusi, CBN governor

The revenue reconciliation committee set up by the federal government over the alleged unremitted $49.8 billion from crude oil sales clears the Nigerian National Petroleum Resources, stating that no money is missing

By Vincent Nzemeke  |  Jan. 6, 2014 @ 01:00 GMT

THE dust raised by the alleged unremitted $49.8 billion revenue from crude oil exports by the Nigerian National Petroleum Corporation, NNPC, over the period January 2012 to July 2013, has been settled. The revennue reconciliation meeting held over the alleged unremitted mney rose in stout defence of the NNPC, declaring that the money has been accounted for. The allegation was contained in a letter dated September 25, which Sanusi Lamido Sanusi, the governor of Central Bank of Nigeria, CBN, sent to President Goodluck Jonathan.  The CBN raised the concern in the context of low accretion to the foreign exchange reserves despite sustained high oil prices. When the letter was leaked to the press, it generated a lot of concern in the country. Even former President Olusegun Obasanjo referred to it in his 18-page letter to the president on December 2. Expectedly, the letter worsened the tension in the country over the alleged unremitted money.

In order to douse the tension and clear the air,  Andrew Yakubu, group managing director, NNPC, at a press conference December 13, provided figures to show that no money was missing and that the Corporation had remitted more money than the CBN stated. Because of the raging controversy and public outcry over the alleged unremitted funds, the federal government promptly set up a revenue reconciliation meeting among the CBN,  the NNPC, the Department of Petroleum Resources, DPR, the Federal Inland Revenue Service, FIRS, the office of the accountant general of the federation, AGF, the Budget Office of the federation, and the federal ministries of finance and petroleum resources.

Based on the outcome of the meeting, key officials of the organisations issued a joint press statement which was presented at a joint press conference on December 18, to dismiss the CBN allegation. A summary of the outcome of the meeting clarified issues raised by the CBN in its letter. According to the CBN, based on data from pre-shipment inspection agents, over the period January 2012 to July 2013, a total of 594.02 million barrels of crude oil were lifted by the NNPC, amounting to about $65.3 billion. However, the amount remitted into the Federation Account at the CBN amounted to only $15.53 billion. This was what prompted the CBN to raise the issue of an observed gap in expected revenues.

Andrew Yakubu, GMD, NNPC

At the revenue reconciliation meeting, the NNPC noted that the actual proceeds from crude oil exports over the period amounted to $67.12 billion, and was thus about $1.79 billion higher than the revenues reported by the CBN (possibly due to timing differences and NPDC liftings which were not included in the CBN report). According to the NNPC’s records, the total revenues of $67.12 billion, was comprised of revenues which directly accrued to NNPC (for the Federation Account) of $14 billion; and additional revenues lifted by NNPC on behalf of other parties as follows: for FIRS ($15 billion), for DPR ($2 billion), for NPDC ($6 billion) and for other third party financing ($2 billion). In addition, domestic crude lifted by the NNPC amounted to about $28 billion. This domestic crude component was not reflected in the CBN’s foreign accounts, but was rather paid directly in Naira into the Federation Account. “Taking account of these various exports conducted on behalf of the non-NNPC parties, the total of USD67 billion was mostly accounted for. This substantially addresses the issues raised by the CBN,” a joint statement issued by the revenue reconciliation meeting said.

The statement said: “The Federation Account indicates that over the period January 2012 to July 2013, a shortfall of USD10.8 billion was recorded from the domestic crude oil receipts. This shortfall has been acknowledged by NNPC, but the magnitude of the shortfall is still disputed by NNPC. The shortfall is explained to be the result of subsidy claims, unrecovered crude/product losses, and cost of strategic petroleum storage (which is currently not captured in the PPPRA template for refunds). This figure is also well-known to all stakeholders at the Federation Account Allocation Committee, FAAC, and is reported and updated on a monthly basis. However, all parties concerned are working assiduously through the ongoing reconciliation efforts to resolve this.

“To tackle this shortfall in revenues, it said that the government has initiated various steps to address these challenges from both security and operational fronts. “As a result of the changing structure of the business arrangements – from joint ventures to production sharing contracts, alternative financing arrangements, and the impact of the fiscal regime on gas development – the government take in recent years has been declining. In this regard, a quick passage of the Petroleum Industry Bill, PIB, will help to reverse this trend”, it said.

Prior to the revenue reconciliation meeting, politicians opposed to Jonathan saw Sanusi’s letter as an opportunity to hurl invectives at him. They accused the president of encouraging corruption in the country. The All Progressives Congress, APC, said the funds Sanusi alleged were missing had been stolen by Jonathan in preparation for the 2015 elections. Lai Mohammed, the party’s spokesman said: “It is a deliberate scheme by the government aimed at 2015. It is a war chest and if it is not, the president must speak up if the government is not culpable. Never in the history of the country has the level of corruption been so high.”

But Yakubu had described the allegations as mere fabrications aimed at tarnishing the image of the corporation. He said Sanusi’s accusations were borne out of a surprising lack of understanding of how proceeds from crude oil sales were remitted into the federation accounts. He also added that it was unusual for NNPC to withhold any crude oil sale receipt due to the federation account or any other statutory remittance and that Sanusi’s was attempting to use the accusations as an instrument to stoke the fire of an already charged political atmosphere in the country.


But on Wednesday, December 18, Ngozi Okonjo-Iweala, coordinating minister of the economy and minister of finance, quash Sanusi’s claim. At the joint press conference attended by Diezani Alison-Madueke, minister of petroleum resources, Yakubu and Sanusi, Okonjo-Iweala declared: “What we have done so far shows that for the $49.8 billion, and that is the first point we want to make, there are  some perhaps misconceptions or misunderstandings that led to this  number and we have been able to come to the conclusion that we can  account for this amount and the second point is that within this, yes,  there are some shortfalls that both the NNPC and the ministry of  finance have been working on for quite some time and even with the CBN as  an ongoing matter and we will come to do that through the FAAC  committee. And we will address that. But the first point is the 49.8 billion, to clarify that we have been able to account for this amount.”

“We have been able to get to the bottom of the $49.8 billion that was indicated in the CBN memo. But also due to the way the accounting for the crude was done, some of it that was being lifted for other parties to the tune that $24 billion was said to be missing but it has been accounted for. So the bulk of the sum of $49 billion has been accounted for and that is what the reconciliation exercise is about.  So it is very clear that this is not missing.”

On his part, Sanusi stated that what the CBN had in its records was $65 billion shipped by NNPC and about $15 billion returned as equity to the federation account but after the letter to the president, it was discovered that: “Out of the $65 billion that NNPC shipped, $24 billion did not belong to NNPC, it was the crude that was paid by oil companies as tax and royalties and shipment for them from NPDC and so on. So that explains half of the sum. Now the outstanding issues are with the $28 billion domestic crude which has been taken by NNPC. From our records we have received $16 billion, there is a shortfall of $12 billion and we are told that shortfall has always been a part of an ongoing discussion with ministries of finance and petroleum and NNPC. So this is where we are.  Finance, NNPC, all parties are going to try to resolve this matter.”

Later that day when he appeared before the senate committee on finance, Sanusi, said he did nothing wrong by alerting the president of an alleged missing N8 trillion oil money because part of his duties expects him to hint the president whenever he suspects public funds were being diverted. He added that while he did not conclude the money was missing, he informed the president to order an investigation.

“I repeat Mr. Chairman that we did not see the letter as a conclusion of our investigation but an invitation to investigate. So, the conclusion that $49.8 billion was missing was wrong even though we had the allegation that it wasn’t remitted.”

Contact Us