NEITI Exposes NPDC’s Failure to Remit $4.9bn to Federation Account

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Omololu Ogunmade in Abuja
The Nigeria Extractive Industry Transparent Initiative (NEITI) yesterday told the Joint Senate Committee on Petroleum (Upstream, Downstream) and Finance that the Nigeria Petroleum Development Company (NPDC) failed to remit a whopping $4.977 billion to the federation account between 2010 till date.

The group, which said the figure included $3.277 + $1.7 billion, therefore, recommended the prompt remittance of the sum along with another N68.2 billion. It also called for the recovery of all cash calls paid to NPDC in respect of the divested assets totalling $148.29 million and N2.42 Billion.

The disclosures were made at a one-day public hearing organised by the committee in the National Assembly.
The Senate had on December 13, 2016, accused the Nigerian National Petroleum Corporation (NNPC) and its subsidiary, the NPDC, of alleged unlawful and wilful misappropriation of public revenue to the tune of $3.487 billion and another $1.847 billion and consequently mandated the committee to investigate the allegation. The motion was moved by Senator Dino Melaye (Kogi West).

Melaye said the non-remittances involved Oil Mining Licences (OMLs) 61, 62, 63 valued at $3.4 billion and another OMLs 65, 111,119 worth $1.847 billion out of which it said NPDC had only remitted $100 million.

Making submissions at the hearing yesterday, the Executive Secretary of NEITI, Mr. Waziri Adio, in his presentation, recommended that NPDC, should remit the figures and also as a matter of urgency, settle the consideration for the divested assets from the National Oil Company (NAOC) joint venture (JV).

He added: “An investigation aimed at unravelling all issues surrounding the transaction involving transfers of the OMLs to NPDC, and overdue period taken to remit all liabilities should be initiated by the federal government.”
He also said the federal government should review the proprietary rights, processes and transactions involving the assignment of OMLs from NAOC JV to NPDC by NNPC.

He also tasked the federal government to review the processes and transactions leading to the assignment of OMLs from SHELL JV to NPDC as well as the recovery of all cash call revenues paid to NPDC in respect of the divested assets totalling $148.29 million and N2.42 Billion.

He also submitted that National Petroleum Investment Management Services (NAPIMS) and NPDC should provide details of all cash calls revenues paid on divested assets for review, adding that NPDC should provide proper account of lifting and payments to the federation account on fields operated on behalf of the federation for which cash calls were made.
He further revealed that “the consideration computed by Department of Petroleum Resources (DPR) with respect to the eight (8) OMLs assigned to NPDC from SHELL JV between 2010 and 2011 was $1.8 Billion and of this amount, no consideration was paid from the dates of transfer up till April 2014 when the sum of $100 million was paid, leaving an outstanding balance of $1.7 billion as at the time of reporting.

“NEITI believes that the assignments of the OMLs were not arm’s length transactions and were also undervalued. For instance, the Price Waterhouse Coopers (PWC) forensic audit report on NNPC in 2014 estimated the value of NNPC’s 55 per cent equity assigned to NPDC to be about $3.4 billion based on commercial value paid by third parties on the sale of SHELL’s equity (45 per cent) in the same OMLs.”

However, in its presentation, NPDC, represented by its Managing Director, Yusuf Matashi, claimed that it was only withholding $1.7 billion out of which it said it had remitted $100 million into the federation account. But the NNPC, which failed to make any presentation at the event, said it aligned itself with the presentation of NPDC.

But the committee disallowed the representative of Central Bank of Nigeria (CBN) from making any presentation at the event, saying it would only take presentations from the Governor of CBN, Mr. Godwin Emefiele, or a deputy governor who were absent.

Also yesterday, the Senate Committee on Works, threatened to arrest anyone who fails to respond to its summons. The Chairman, Senate Committee on Works, Senator Kabiru Gaya, issued the threat following the failure of Permanent Secretary, Ministry of Power, Works and Housing and other directors in the ministry to attend an investigative public hearing on alleged fraudulent award of contracts in some parts of the country.

The contracts involved were the LOT B2 construction of Mararaba – Mubi-Madagali-Michika Road in Adamawa and Borno States and LOT C3 – rehabilitation of the Zaria-Hunkuyi-Kafur-Gidan Mutundaya Road in Kaduna and Kano States.
“Most of the clients are the ministry’s staff and even the petitioners blamed the ministry’s staff, and none of them is here, not even a representation,” Gaya said in disappointment.

  • Daniel Obior

    The more the cesspool of corruption called NNPC and its subsidiaries are examined, the more outrageous the level of graft found. The interesting thing is that virtually nobody has been held accountable, over the years.