NNPC, Everybody’s Butt

More organisations have joined in whistle-blowing against the failure of the Nigerian National Petroleum Corporation to remit oil revenue into the federation account. Both the Nigerian Extractive Industries Transparency Initiative and the Berne Declaration, have accused the corporation of hiding $22.8 billion oil money in its financial statement between 2009 and 2011

|  By Anayo Ezugwu   |  Mar. 17, 2014 @ 01:00 GMT

MORE revelations have come to light at the on-going National Assembly probe of non-remittance of oil revenue into the federation account and the issue of kerosene subsidy by the Nigerian National Petroleum Corporation, NNPC. At the House of Representatives Committee on Petroleum Resources (Upstream) public sitting, the Nigerian Extractive Industries Transparency Initiative, NEITI, confirmed the report of Berne Declaration, a Swiss-based non-governmental organisation, NGO, that the NNPC did not disclose the sum of $22.8 billion in its audited financial statement between 2009 and 2011.

The NEITI also accused the corporation of causing the nation to lose N98.3 billion to foreign exchange rate differentials during the period. The agency told the committee that the findings came out of its audit report on the finances of the corporation from 2009 to 2011. The N98.3 billion loss, according to NEITI, resulted from the decision of  the NNPC to use exchange rates different from those of the Central Bank of Nigeria, CBN, in its transactions. The country reportedly lost about $6.8bn in 2013 to the alleged connivance between the NNPC and the traders, which the Berne Declaration said involved the sale of Nigeria’s crude oil below international prices.

On Tuesday, February 25, Andrew Yakubu, group managing director, NNPC, had appeared before the committee to deny the claim by the Berne Declaration. But Zainab Ahmed, executive secretary, NEITI, in her testimony, said she  did not only agree with the Berne Declaration report, but that NEITI’s audit report also indicted the NNPC. She faulted the denial of the NNPC and noted that the corporation  used an exchange rate different from that of the CBN in its transactions. This, according to her, resulted in the loss of N98.3bn to the country between 2009 and 2011.


She promised to furnish the committee with a comprehensive analysis of the link between the NEITI audit report and the Berne Declaration, both of which confirmed the connivance of NNPC with foreign oil trading companies to short-change Nigeria.”There is a similarity in NEITI’s audit report and the Berne Declaration report. The report (Berne Declaration) has a lot of substance in it. NEITI will go back and link the Berne Declaration report with the NEITI audit report,” Ahmed said.

She also told the committee that NEITI strongly opposed the daily allocation of 445,000 barrels of crude to the NNPC on the ground that the corporation did not have the capacity to utilise the allocation. Ahmed explained that the refineries in the country lack the capacity to refine the crude oil, and called on the federal government to review the policy. Ahmed, who urged the government to urgently privatise the refineries, said, “The 445,000 barrels per day allocation should be reviewed to the actual refining capacity of the refineries.”

But the NNPC has described the allegation by the NEITI as an orchestrated campaign of calumny designed to tarnish its reputation by some unscrupulous elements. The corporation faulted the position of the NEITI over fresh unremitted $22.8 billion oil revenue by the corporation. Omar Farouk Ibrahim, acting group general manager, group public affairs division, NNPC, described the deliberate misrepresentation made by the NEITI before the committee on the Berne Declaration Report as an example of the well – choreographed negative campaign against the corporation.

“Some of the reports had sensational headlines alleging that NEITI uncovered fresh unremitted $22.8 billion oil revenue by the NNPC. However, the body of the stories were totally different from the headlines in terms of the message and content,” Ibrahim said. He noted that a careful perusal of the original presentation made by the NEITI Executive Secretary, Hajiya Zainab Ahmed, indicated that the sensational headlines were mere inventions calculated to cast aspersion on the image of the corporation and heat up the polity.

“We wish to state that there is nothing farther from the truth. The NNPC has a copy of the presentation made by the Executive Secretary of NEITI, Hajiya Zainab Ahmed, and nowhere did she allege that the NNPC failed to remit $22.8 billion to the Federation Account. We are convinced that there is a conspiracy by some groups or individuals to drag down the name of the corporation by whatever means possible,” he said, adding that despite the obvious negative campaign against the corporation, the management of the NNPC under Andrew Yakubu remained undaunted and determined to achieve its mandate.

In his submission, Haruna Momoh, managing director, Pipelines and Product Marketing Company, PPMC, debunked the claim that the nation was losing $8 billion annually through swap arrangement, saying the deal was in the best interest of the country. He insisted that the deal was transparent and temporary.  “It will soon be phased out once the refineries are operating in full capacity and when new refineries come on board,” he said.

Kingsley Moghalu, deputy governor (operations) CBN, told the committee that the bank would check its books to see if it can find any transaction relating to the $6.8 billion allegation. “We take note of the Berne Declaration; we will look at our records and see if there’s anything relating to it and get back to the committee.”

The committee later adjourned hearing till March 25, and also ruled that the minister of petroleum resources; director, Department of Petroleum Resources, DPR, chairman, Economic and Financial Crimes Commission, EFCC, acting governor, CBN,  executive secretary, Petroleum Products Pricing Regulatory Agency, PPPRA, among others, should appear before the panel on the adjourned date.

Meanwhile, the House Committee on Finance has accused the NNPC of withholding N105 billion of independent revenue from the Consolidated Revenue Fund of the Federation. Abdulmumin Jibrin, chairman of the committee, said records before the members had shown that the money had not been remitted. Jibrin stated that the committee got the records from the Budget Office of the Federation.

However, Tim Okon, Chief Strategist, NNPC, who led the corporation’s team to the meeting, expressed surprise at the information. He claimed not to be aware that the corporation owed such an amount. In his response, Jibrin dared Okon to put his denial in writing and forward it to the committee by Thursday, March 6. The National Agency for Science, Engineering and Infrastructure, which also appeared before the committee, claimed not to be aware that its 2014 budget was N80 million instead of N29 million. The committee also directed the agency to put the denial in writing and forward it to the members.