BREAKING NEWS, Oil & Gas
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Nigeria spends more than $7 billion on Joint Venture Cash Calls with international oil companies while the Nigeria Liquefied Natural Gas company is yet to remit N2.32 dividend to the federal government, according to the Nigeria Extractive Industries Transparency Initiatives, 2012 audit report
| By Anayo Ezugwu | Aug 10, 2015 @ 01:00 GMT |
THE federal government will have to devise a means to get the Nigerian Liquefied Natural Gas NLNG, company to remit more than N2.32 dividend that accrued to it to the federal account. According to the Nigeria Extractive Industries Transparency Initiative, NEITI, audit report 2012, the NLNG, company has not remitted the money. The report also revealed that Nigeria lost N220 billion to crude oil swap deals and that the federal government spent more than N4.8 trillion on fuel subsidy.
Zainab Ahmed, executive secretary, NEITI, disclosed these on Sunday, August 2, when she led a delegation of the agency’s management team on a courtesy visit to Nasir el-Rufai, Kaduna State governor. Ahmed, while soliciting the support of the governor towards the implementation of the findings and recommendations contained in NEITI audit reports, said issues thrown up in the reports had remained unimplemented and described the development as “an unfortunate recurring decimal.”
Realnews reports that data from NEITI audit reports showed that Nigeria lost about 160 million barrels of crude oil valued at $13.7 billion to crude oil theft between 2009 and 2012. The figures were obtained from three international oil companies, namely: Shell Production and Development Company, Nigerian Agip Oil Company and Chevron Nigeria Limited.
Between 2009 and 2012, Nigeria lost about $1.1 billion to crude oil and product swap, while the NLNG dividends to the tune of $11.6 billion had yet to be remitted to the federation account. From the NEITI 2012 report, Nigeria spent more than $7 billion on Joint Venture Cash Calls with international oil companies.
NEITI’s position is that the federal government should divest its shares in the JVs, incorporate the JVs and/or transit them to other types of operating arrangements like the Production Sharing Contracts.
NEITI’s recent audit that examined how states disbursed and used revenues accruing to them from their share of the federation account found that most states in the country had over the years depended on oil revenues and did little or nothing to generate revenues internally. “The country and the states are over reliant on oil revenues. They have neglected the huge potential abundant within. Some states have as little as three per cent internally generated revenue, carry a huge recurrent expenditure and deploy very little to capital and social services like education, health care and security. What we saw from the report of the nine of the states sampled is shocking,” the executive secretary of NEITI said.
She also called for the unbundling of the Nigerian National Petroleum Corporation and commercialisation of the new sub business units to free the corporation from regulatory functions. Explaining that more than N4.8 trillion had been expended by the federal government on subsidy payments alone, Ahmed called for a gradual phasing out of the subsidy scheme. She said the scheme, which was designed to benefit the ordinary Nigerian, had become a drain pipe on government revenue with a few privileged individuals gaining through all forms of manipulations and corrupt practices.
Ahmed urged Governor el-Rufai to study the report for the benefit of Kaduna State. She observed that the NEITI audit reports of the oil and gas sector from 1999 to 2012, the fiscal allocation and statutory disbursement audit findings and recommendations covering years 2007 to 2011, and the solid minerals sector audit that spanned years 2007 to 2012 contained a wealth of information that further informed the need for urgent and speedy reforms of the extractive sector in Nigeria.
Responding, Governor El-Rufai, who is a member of the National Economic Council, pledged his support and commitment to the Extractive Industries Transparency Initiative, EITI, process in Nigeria as a global response to fight the resource curse. “NEITI has remained one of the few institutions of government set up for reforms that is still working because the organisation, by its unique composition, was designed to succeed. We will study the reports and work with NEITI to reform our oil, gas and mining sectors.”
The governor noted that as a member of the team set up by the NEC to probe the inflows and outflows from the Federation Account, the NEITI reports would be a reliable working document for the committee. He promised that all “unremitted funds arising from under payments, under assessments and other malpractices uncovered by NEITI in its reports will be recovered and used to improve the country’s infrastructure and living standards of the people.”
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