Oil Payments: NEITI Summons NNPC, Shell Others

Nigeria Extractive Industries Transparency Initiative (NEITI) has invited the Nigerian National Petroleum Corporation (NNPC) and some oil companies to streamline its audit report of petroleum proceeds accruing to the Federal Government between 2009 and 2011. Also invited are Shell Petroleum Development Company (SPDC), Chevron Nigeria Limited, and Nigeria Agip Oil Company (NAOC) Ltd among others to validate and reconcile payments they made to the government.

The invitation is also extended to all companies and government agencies involved in payment and receipt of revenue from Nigeria’s petroleum sector is expected to validate all payments within the period under review to avoid condemnation of its audit report when published.

It is also expected that the exercise will afford all parties involved an opportunity to reconcile such payments with data collected by NEITI’s independent auditors, as well as review presentations on system documentation by companies and relevant government agencies in line with the audit requirement.

Others companies to appear before it in Lagos are NNPC, SPDC, NAOC, Chevron, Shell Nigeria Exploration and Production Company (SNEPCO), Nigeria Agip Exploration (NAE), Agip Energy Natural Resources (AENR), Mobil Producing Nigeria Unlimited, Esso Exploration and Production Nigeria Limited, Nigerian Petroleum Development Company (NPDC) and CONOCO Phillips.

Also among the list are the Office of the Accountant General of the Federation, Power Holding Company of Nigeria (PHCN), Nigeria Gas Company (NGC), Nigeria Liquefied Natural Gas (NLNG), Federal Inland Revenue Services (FIRS), Department of Petroleum Resources (DPR), Central Bank of Nigeria (CBN), Nigeria Maritime Administration and Safety Agency (NIMASA) and the Nigeria Petroleum Investment Management Services (NAPIMS).

The invited companies are expected to tender documents such as system documentation on production and financial flows including payments and receipts of such flows by relevant government agencies on behalf of the federation as well as evidence of streams of payments made by companies.

NEITI’s audit of Nigeria’s oil and gas sector has come with disclosure of anomalies in revenue remittance by oil and gas companies to the federation account, with NNPC majorly accused in the audit reports of falling short in its remittance of oil proceeds to the government.

Nigeria’s Oil Revenue Falls by N260bn in August

A decrease in crude oil production and lifting operations occasioned by the force majure that was declared at the Bonny Terminal last month lowered gross federally-collected revenue for August by as much N260.512 billion.

The Minister of State for Finance, Alhaji Yerima Ngama, disclosed this yesterday in Abuja while briefing journalists at the end of the monthly meeting of the Federation Account Allocation Committee. According to the minister, gross revenue for August dropped to N564.884 billion, compared to N825.396 billion in July.

Other factors like the shutdown of Balema Gas Plant and Trans Niger Pipeline as well as decline in Production Sharing Contract (PSC) and Modified Carry Arrangement (MCA) were also identified as contributory factors to the drop in revenue for August.  As a result, FAAC withdrew N26.214 billion from the Excess Crude Account to shore up revenue for August.

Ngama also said that N124.092 billion was transferred to the ECA in August, thus bringing its current value to about $8.2 billion.

Oil theft: Ex-Minister Arrested

Former Minister of Interior, Captain Emmanuel Iheanacho has been arrested over his alleged involvement in the hijack of a vessel said to be carrying suspected stolen petroleum products. The Director General of the Nigerian Maritime Administration and Safety Agency (NIMASA)  Mr. Patrick Akpobolokemi who disclosed the arrest  said that the search for the sponsors of these pirates has led to the tracing of the stolen products to Integrated oil and Gas Limited tank farm owned by the Captain Iheanacho. The premises of Integrated oil and Gas Limited tank farm has been sealed off pending investigation.

NIMASA has realized that there are the kingpins and the big men who facilitate piracy adding the agency in collaboration with other security operatives and the agency is poised to unravel the people behind the sale, purchase and storage of the stolen products.

Subsidy Scam: House of Reps, CBN sued

One of the companies allegedly indicted in the fuel subsidy probe by the Hon. Farouk Lawan-led Ad hoc Committee on the Administration of Petroleum Subsidy has dragged the House of Representatives alongside the Central Bank of Nigeria (CBN), and Skye Bank Plc to court over wrongful accusation and defamation of character.

The aggrieved company, Serene Greenfields Limited, had written to the House of Representatives, CBN and Skye Bank to clarify their roles in the said subsidy probe, which it claimed were false, wrongful and damaging.

Lawan’s committee had on page 145 under the sub-heading; “Financial Infractions” indicted about 15 oil companies/marketers including Serene Greenfields ltd, for allegedly obtaining a combined forex of $337,842,663.86 and $64,767,763.22 in 2010 and 2011 respectively “but were not found to have supplied and collected subsidy on petroleum products”.

However, the company in a letter dated April 23, 2012 asked its banker and financier, Skye Bank Plc, from which it obtained loan for its business, to immediately issue “a letter to the Committee highlighting the fact that the company was never involved in any PMS (Premium Motor Spirit) imports and that the transaction in question was an AGO (Automated Gas Oil) transaction which was followed to the end.

Onshore-Offshore Dichotomy: FG Forecloses Review

The Federal Government has ruled out revisiting the issue of the onshore-offshore oil dichotomy. Attorney General of the Federation (AGF) and Minister of Justice, Mr. Mohammed Bello Adoke, stated the government’s position on the issue, which has already pitted the North against the South, at a valedictory session in honour of Justice Francis Fedode Tabai at the Supreme Court, Abuja.

He warned politicians and legal practitioners to avoid overheating the polity through the current debate on the need or otherwise to review the onshore-offshore oil dichotomy, which partly forms the basis for the allocation of derivation proceeds from the Federation Account.

His warning came against the backdrop of the clamour for a review of the onshore-offshore oil dichotomy by Northern governors who hold the view that the formula has reduced the distributable funds from the Federation Account to all tiers of government. However, their counterparts from the South-south and people of the oil-producing littoral states have rejected their position and even demanded that the derivation formula be raised from the current 13 per cent to 50 per cent.  Adoke said the debate, which is being elevated to an urgent national matter, with all the potential to generate acrimonious wrangling within the polity, and being made to look as if it was new, had been determined by the Supreme Court long time ago.