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Waziri Adio, NEITI boss

The executive secretary of the Nigeria Extractive Industry Transparency Initiative (NEITI),Waziri Adio, disclosed on Wednesday, June 15, that Nigeria National Petroleum Corporation (NNPC) did not remit $12.9bn to the federation account‎ between 2005 and 2013.

He said this during his presentation on the NEITI 2013 audit report in the oil and gas sector at the Senate in Abuja.

Adio said that Nigeria is only sure of the amount of crude oil it exports, but cannot say the quantity of the commodity it produces..

He explained that the lack of accurate information on the actual quantity of crude oil Nigeria produces was compounded by the absence of a proper metering system.

“In 2013,  the country produced  800.3 million barrels and out of that the country made $58.07 billion  and that represents  an eight percent  reduction on the $62.9bn  that the country made in 2012.

“The second issue is that there are some monies that were withheld, lost or  underpaid for different reasons. These monies are in three tranches. The first is in the category of the unremitted, and the unremitted amounted to $3.8bn and N358m.

“The second category is the category of losses, because of some inefficient practices and theft among other things, the country lost $5.9bn and N20bn. Under the category of the under-assessed the country lost $599.8m.‎

“When we look at the unremitted $1.7bn is still being owed the federation for OMLS. Also,  $1.29 bn  from the NLNG dividends and N351bn from unpaid domestic crude debt, N2.17bn  from cash calls refunds,” he said.

He said those are the monies that should have been paid to the federation but were not paid however, he went ahead to explain the second category of losses by NNPC and its subsidiaries.

He continued: “Out of the $5.9bn, N4.7 bn was lost to theft and vandalism. N20bn was lost because the NNPC did not observe the 90 days credit grace and when you look at the time value of money, if you calculate at 12 percent interest  the country lost N20bn.‎

“Some of the issues in the report. The first is about the assets divested by NNPC to NPDC. NNPC between 2010 and  2011 divested eight assets  that belong to the federation to its upstream subsidiary NPDC. So NNPC divested 55 percent of the shares being held on behalf of the federation to the NPDC.

“These eight OMLS are valued at $1.8bn by DPR. NPDC paid only $100m out of the $1.8bn meaning there is an outstanding of $1.7 bn, and even that $100m was paid two years after.

“What this means is that NNPC lifted oil on behalf of NPDC  not on behalf the federation despite the fact that NPDC has not fully paid for those assets.

“Another issue that came out of the audit is the NLNG dividend. NLNG in 2013 paid $1.28 bn, but the money was not remitted to the federation account. Beyond this  between 2005 and 2013 NLNG paid $12.9bn to NNPC and NNPC acknowledged receiving it,  but the money was not remitted to the federation account.

“Another  is the losses incurred from swap and OPA. This is the arrangement  where NNPC exchanges crude for product  and the country lost $518m due to the inefficiency of the swap and OPA. $211m was lost to product swap and $306m was lost to OPA.

Adio said N1.3trillion was  posted  for petroleum subsidy in 2013 which was 30 percent higher than the total for budget education,  health, water  and  SURE-P.

He also said that he discovered that for infrastructural deficit, the country  can only say  what it exports and cannot say authoritatively what it produces which has always been an issue.

He added that the audit confirms that the country still  don’t have meters where they should be which can cause serious implication for revenue and national security‎.

After the presentation by the executive secretary of NEITI, Bukola Saraki, the Senate President called for the prosecution of those responsible for the fraud in the oil and gas sector.

Saraki assured the NEITI boss that the Senate would take action on the recommendations in the report.

‎”I can assure you will discuss this report fully, and we will take action. We will task the executive to prosecute those who are culpable,” he said.

Saraki thereafter, set up an ad hoc committee chaired by Jibrin Barau, a senator from Kano state, to look into the issue to report in four weeks‎.

The Senate on Thursday, June 2, resolved to invite the executive secretary of Nigerian Extractive Industries Transparency Initiative (NEITI), Waziri Adio following his audit report.

This decision was taken after the motion by Senator Tijjani Yahaya Kaura representing Zamfara North senatorial district.

The motion is titled: The urgent need for the Senate to look into the NEITI 2013 oil, gas and solid minerals audit rep
4:08 PM

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