NNPC’s Position on the Allegation of Non-Remittance of $49.8bn Oil Revenue

NNPC’s Position on the Allegation of Non-Remittance of $49.8bn Oil Revenue

An Address by the Group Managing Director of the Nigerian National Petroleum Corporation, Engr. Andrew Yakubu, at the World Press Conference Held on Friday 13th December, 2013, at the Protea Hotel, Asokoro, Abuja, to Present NNPC’s Position on the Allegation of Non-Remittance of $49.8bn Oil Revenue from January 2012 to July 2013

Ladies and Gentlemen of the Press,

Welcome to this press conference.

As you are well aware, it is not in our character to join issues or trade blames with other agencies of government. But considering the high level of publicity that the purported letter from the Governor of the Central Bank of Nigeria (CBN) to the President has generated, and the erroneous impression it has created among Nigerians. It has become necessary to set the records straight.

The statement credited to the CBN Governor that NNPC has failed to remit the sum of $49.8bn representing 76% of total national oil receipts is borne out of a surprising lack of understanding of how revenues from crude oil sales are remitted into the Federation Account. I will therefore explain the process and put the figures in perspective in order for you to understand and let the world know that NNPC is not in the business of withholding any crude oil receipts due the Federation Account or any other statutory remittances.

All NNPC crude oil liftings is made up of the following:

1. Equity Crude

2. Royalty Oil

3. Tax Oil

4. Volume for Third Party Financing, and

5. NPDC equity volume.

It is important to stress that remittances of proceeds from the above liftings are made according to statutory and production arrangements. Accordingly, proceeds from Equity crude is paid by NNPC into the Federation Account which is held by the Central Bank of Nigeria.

Proceeds from Royalty oil is paid to Department of Petroleum Resources, DPR, whose designated account is managed by the same CBN.

Similarly, the proceeds from Tax Oil or Petroleum Profit Tax lifted by NNPC is paid directly into the Federal Inland Revenue Service, (FIRS) account also managed by the CBN.

Ladies and Gentlemen, it should now be clear to all that NNPC is by statutory requirement responsible for direct remittances of only one stream of liftings, namely Equity Crude.

Analysis of the figures is as follows;

The CBN letter claims that for the period 1st Jan 2012 to 31st July 2013, total National crude oil liftings was 1.287 billion barrels. Our records show that the total national crude lifting for the same period was actually higher at 1.330 billion barrels. Furthermore, total NNPC liftings during the same period was again higher at 618.552 million barrels as against the 594.024 million barrels stated by CBN.

We further wish to state that the proceeds from the total NNPC liftings comprising Federation Equity, Royalty Oil , Tax Oil, Volume for Third Party Finance and NPDC equity amount to US$67.12bn as against the $65.33bn that the CBN stated.

NNPC remitted its portion which is $18.48bn (27.5%) into the Federation Account being the total proceeds from Equity Crude and gas sales of which CBN acknowledged receipt of $15.528bn (24%). At this point, we wish to categorically state that all the proceeds from NNPC have been remitted as statutorily required.

On the issue of US$49.8 billion or 76% of total national liftings and the alleged unremitted funds, we would like to clarify that this represents the balance of other streams as stated above. These, as I stated earlier, are remitted to the various Agencies which are statutorily empowered to collect and remit same into the Federation Account.

For the benefits of those who may not be aware of the workings of the industry, it is imperative to state that the CBN, NNPC, FIRS and DPR meet regularly to reconcile liftings, sales and remittance of proceeds. Therefore, the data presented are jointly reconciled by CBN, NNPC, FIRS, and DPR.

The CBN further alleged that NNPC owes the Federal Government another N22bn in unpaid levies to the National Export Supervisory Scheme (NESS). It must also be noted that the levies under the NESS are paid to third party inspectors based on services rendered to the Federal Government.

The current position is that NNPC has paid a total of $114.78 million from inception of NESS in 2009 up to October 2013 as against the total budget of $117.08 million for the same period. These payments have been reconciled with the CBN, who are again the custodians of the NESS account that is operated on a draw-down basis by the CBN.

Ladies and gentlemen, NNPC hereby states that in carrying out our statutory duties we will continue to maintain the highest level of transparency and accountability. Please be assured that NNPC remains available at all times to provide clarifications on these issues or any other matter relating to our responsibility to the Federation and the Nigerian people.

Source: nnpcgroup.com

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