NEITI: Unremitted NLNG  Earnings by NNPC Hits $15.8bn


By Chineme  Okafor  in Abuja

The total amount of earnings due to the Federation Account from the Nigerian Liquefied Natural Gas Limited (NLNG) which the Nigerian National Petroleum Corporation reportedly claimed and should have remitted but did not, has risen to $15.8 billion, a new report by the Nigeria Extractive Industries Transparency Initiative (NEITI) has revealed.

NEITI’s annual audit report released yesterday in Abuja, which covered operations in Nigeria’s oil and gas sector for 2014, stated that as at the close of that year, the NNPC could not account for $1.42 billion proceeds paid to it by NLNG.

It said in addition to $12.92 billion NLNG payments for the previous years which the corporation was yet to account for, the total unremitted NLNG proceeds to the Federation by NNPC had gone up to $15.8 billion.

The audit report also said Nigeria earned $55.5 billion from the oil and gas sector, while another on solid minerals mining stated that N55.82 billion was made by the country from the solid minerals sector in 2014.

“NLNG paid $1.42 billion to NNPC as dividends, loan and interest repayments for 2014 but the amount could not be traced to the Federation Account.

“Between 2005 and 2013, there was an outstanding of $12.92 billion of dividends, interest and loan repayment made by NLNG to NNPC but not remitted to the Federation Account.

“The 2014 audit uncovered evidence of $1.5 billion paid by NLNG to NNPC between 2000 and 2004 but also not remitted. This brings the sum of unremitted NLNG dividends, interest and loan repayment to $15.8 billion as at the end of 2014,” said the report.

The report on oil and gas equally showed that $4.7 billion and N318.2 billion that should have gone to the Federation Account from oil and gas businesses were not remitted to it by the NNPC and its Exploration and Production (E&P) arm, the Nigerian Petroleum Development Company (NPDC).

It added that Nigeria lost $198.7 million in that year to crude-for-product swap and Offshore Processing Arrangements (OPA).

“At the close of the 2014 audits, NPDC had not paid the outstanding $1.7 billion for the eight OMLs (Oil Mining Licenses) under the Shell JV divested to it by NNPC. NPDC had also not paid for the four OMLs under the NAOC JV divested to it by NNPC. Those four assets were recently valued by DPR (Department of Petroleum Resources) at $2.25 billion; NPDC had sought clarification for the basis of the valuation,” it explained.

It said the total revenue flows for the oil and gas sector fell from $58.07 to $55.5 billion between 2013 and 2014, indicating a decline of about five per cent.

The report added that 22 billion litres of petroleum products were imported into the country in 2014, and N1.2 trillion processed as subsidy claims by oil marketers.

According to it, 41 oil and gas companies and 16 government agencies were audited for the 2014 audit by SIAO and Co., a Nigerian accounting and auditing firm.

The other report however noted that there was an improved revenue flow for the country from the solid minerals sector in 2014, with a 48 per cent rise from the N37.676 billion earned in 2013 to N55.8 billion in 2014.

Conducted by another Nigerian accounting and auditing firm, Amedu Onekpe and Co, 498 companies were covered, out which only 39 met the materiality threshold payments of N3 million and above, and accounted for 90.89 per cent of total payments for the sector.

The report explained that Dangote Cement accounted for 32.18 per cent of the total N1.2 billion paid as royalties for the sector, while limestone and granite accounted for 56.68 and 30.59 per cents respectively of the 36 million tons of solid minerals produced in the sector in 2014.

“The value of exports of solid minerals in 2014 was $26.14 million out of which Lead/Zinc accounted for 90.13 per cent with Free on Board (FOB) value of $23.561 million. Exports figures reported by companies were different from those declared by government agencies,” said the report.

NEITI also stated that N9.9 billion that accrued to the sector up to 31st December 2014 was shared in July 2016 among the three tiers of government, adding that it was the first time revenue from the sector was distributed.

It said: “The solid minerals sector accounted for four per cent of total national export earnings for the year 2014; this disclosure reconfirmed Nigeria’s over dependence on oil and gas and marginal interest in the solid minerals sector in spite of the infinite opportunities.”

The release of the reports, the transparency agency stated, was in accordance with the global Extractive Industries Transparency Initiative (EITI) standards which encourage implementing countries to release their independent industry audit reports at most two years in arrears.