BREAKING NEWS, Featured, Oil & Gas
–
The federal government loses more than $500 million through illicit activities in the management of crude oil swaps
| By Anayo Ezugwu | Aug 3, 2015 @ 01:00 GMT |
ACCORDING to the Nigeria Extractive Industries Transparency Initiative, NEITI, the federal government lost more than $500 million through fraudulent activities in the management of crude oil swaps over the years. NEITI said its audit of the oil and gas sector for 2012 showed that the nation lost about $100 million in swap deal involving the exchange of crude from domestic allocation for refined petroleum products.
The audit report further showed that crude oil worth $6.4 billion was swapped in 2012, while the value of refined products was $6.3 billion, bringing total revenue loss to the federation account from 2009 to $500 million. According to the audit report, Nigeria lost over 23 million barrels of crude valued at over $2.6 billion in 2012 alone. The breakdown shows that the Nigerian National Petroleum Corporation, NNPC, lost over 13 million barrels of crude valued at about $1.5 million. Three International Oil Companies sampled lost over 10 million barrels of crude valued at $1.2 billion.
Ogbonnaya Orji, director of communication, NEITI, who made the disclosures at a World Bank-funded workshop for civil society engaged in the oil and gas sector, noted that asides the loss, the value of the refined products not delivered at all under this arrangement stood at N78.8 billion. “The revenue loss to the nation on crude swap especially at the depot on fuel alone during the same period stood at N11.7 billion or $74.3 million depending on the exchange rate used.”
The NEITI report showed that the country earned a total of $62.9 billion in the year 2012, comprising $30.3 billion from crude oil and gas sales, $26.9 billion from taxes, royalties, rents and $5.6 billion as revenue flows to states, local governments and other entities.
It showed that the aggregate unresolved difference with respect to all the financial flows in 2012 was $47.5 million, representing 0.075 per cent of total financial flows from all sources when compared to 0.14 percent recorded in 2011. According to the report, about N1.3 trillion was processed for payment as subsidy to oil marketers, while the sum of N690 billion was actually paid during the period. “A total of 862.7 million barrels was also recorded as fiscalised crude oil production at an average daily rate of 2.36 million barrels per a day,” it stated.
A comparative breakdown showed that the amount from crude export sale declined to $21.6 billion from $24.7 billion in 2011, representing a 13 per cent decrease. Also, domestic crude sale value declined to $18.15 billion from $18.36 billion in 2011, a 1.0 per cent decrease. Gas sales also declined to $489 million from $610.8 million in 2011, down by 20 per cent. Feed stock, however, grew to $1.84 billion under the period from $1.82 billion in 2011.
The report noted that “previous audit cycle witnessed a steadily increasing trend in the total Financial Flows to the federation from $30.129 billion in 2009, to $44.944 billion in 2010, and $68.442 billion in 2011. However, there was a decline of eight per cent in 2012 to $62.944 billion. The decrease in 2012 was largely due to a drop in the sales revenue from crude oil and gas attributable to reduction in production and lifting volumes as a result of the following: crude theft, deferred production due to destruction of production facilities and crude losses resulting from sabotage and pipeline breakages,” the report added.
|
Tags: barrels Companies crude oil swaps crude theft deferred production subsidy federal government Fraud illicit International NEITI Nigeria Extractive Industries Transparency Initiative Nigerian National Petroleum Corporation NNPC Ogbonnaya Orji oil Oil and Gas Oil Marketers petroleum World Bank
