The Nigerian National Petroleum Corporation says there is nothing illegal about its withdrawal of $1.05bn from the NLNG
By Anayo Ezugwu
The Nigerian National Petroleum Corporation, NNPC, has shed light on the probe of alleged illegal withdrawal from the Nigerian Liquefied Natural Gas, NLNG, Dividend Account by the Senate, clarifying that there was nothing illegitimate about the withdrawals made from the account so far.
The clarification was made by Isiaka Abdulrazaq, the corporation’s chief financial officer, CFO, at an interactive session with the media over the weekend in Lagos. He clarified that the Senate probe was not about missing money as was being insinuated in some quarters, but rather an investigation into whether the NNPC acted legally in withdrawing the sum of $1.05bn from the NLNG Dividend Account to support fuel importation.
According to him, while granting the statutory right of the legislators to carryout oversight functions, relevant extant laws such as the Appropriation Act 2018 defines revenue from NNPC as net of cost, indicating that NNPC has the right to defray the cost of its operations from earnings.
He also cited the NLNG Act which explicitly provides that NNPC could defray its cost from the dividends, as one of the legal grounds relied upon for the expenditure without recourse to appropriation by the National Assembly.
Expatiating further on the matter, Abdulrazaq cited the case instituted by some state governments in 1999 seeking the interpretation of revenue on account of their contention that all accruals from oil and gas operations amount to revenue and should be swept into the Federation Account.
The ruling on that case by the Supreme Court in 2002, according to him, was in tandem with NNPC’s position that revenue is accruals net of cost.
“We have provided the legal authority on which we rely to use funds from the NLNG Dividend Account to the Senate. We believe they will reason with us. But if need be, we will seek legal opinion on it,” the CFO stated.
On the general impression that the NNPC and indeed the entire Oil and Gas Industry is opaque, Abdulrazaq contended that in the light of efforts made by the Management of the NNPC since the inception of the President Muhammadu Buhari administration to entrench a culture of transparency, nothing could be further from the truth.
“NNPC is very open and transparent. We publish our NNPC Monthly Financial and Operations reports in the media. No one does monthly reporting, not even the international oil companies or the publicly quoted companies. The best they do is quarterly reports. But we do monthly reports of revenue (profit and loss for the entire corporation, including the subsidiaries). We do operations report on how much oil and gas was produced, sold and the monetary value; how much products the refineries processed and how much was imported and sold by PPMC. We do all these to defuse the perception of opacity. Yet some people still say we are opaque, and I think that is not fair”, he argued.
Abdulrazak disclosed that as part of the stewardship accounting designed to make NNPC’s operations transparent to the public, the inherited six-year unaudited accounts of the corporation have been audited up to date, stressing that the account for 2017 has been fully audited, approved and forwarded to relevant authorities.
On fuel supply and efforts to ensure zero-scarcity throughout the end of year festivities and beyond, the CFO disclosed that NNPC has 2.6 billion litres of premium motor spirit, petrol, in offshore and onshore storage that could last for 52 days at 50 million litres per day consumption.
Also speaking at the event, Bello Rabiu, the chief operating officer, Upstream, said the major focus of the Upstream Autonomous Business Unit of the NNPC was to drive down the cost of crude oil production and link the Oil and Gas Industry with the economy.
According to him, bringing down the cost of production would lead to cheaper energy cost which would in turn boost industrial and economic growth.
He said security and funding that used to be the bane of Upstream operations have been largely taken care of by the corporation through practical engagement with stakeholders in the Niger Delta region and the cash-call exit programme.
The COO said that as part of efforts to drive down cost, the NNPC was looking at extending the Escravos-Warri crude oil evacuation pipeline surveillance contract model to downstream pipelines to guarantee efficient crude supply to the refineries post-rehabilitation.
“Before now, it was not possible to get crude to Warri and Kaduna refineries. But with the kind of security contract in place for the Warri-Escravos Pipeline, we now have 99% crude oil recovery rate. The balance is paid for by the contractor. That is why we have replicated that model for the Trans-Forcados Pipeline to guarantee security,” Rabiu explained.
– Dec. 10, 2018 @ 13:45 GMT |