Oil Benchmark Increase: CBN Will Respond

The Governor of the Central Bank of Nigeria, Sanusi Lamido Sanusi, has reacted to the increase in the oil price benchmark in 2013 budget passed by the National Assembly, from $75 proposed by the Executive to $79, saying the CBN will adopt an appropriate monetary stance in response to it.

The National Assembly had on December 20 passed a N4.987 trillion budget for the 2013 fiscal year. The approved budget was N63 billion more than the N4.924 trillion proposed by the executive. The difference arose out of the change in the oil price benchmark from $75 to $79.

Some Nigerians had expressed worry over the oil benchmark increase, particularly because of the volatility of the crude oil market. They felt a high oil benchmark would hurt the economy if there were a sudden slump in crude oil price.

Nigeria’s crude oil production slides to 2.09mbpd

Nigeria’s crude oil production, including condensates decreased to 2.09 million barrels per day (bpd) in the first half of 2012, compared with the 2.14 mbd recorded in the first half of 2011.
This figure was however lower than the 2.4mpd production level earlier announced by the Nigerian National Petroleum Corporation (NNPC) during the period under review. This was contained in the Central Bank of Nigeria (CBN) half yearly report released recently.
According to the CBN, the development was attributed to the increased vandalization of oil pipelines and crude oil theft in the Niger Delta region. The report puts aggregate crude oil export for the period under review at 1.64 mbd compared with 1.69 mbd recorded in the corresponding half of 2011. Total associated gas produced during the period was estimated at 34.10 million cubic metres (MMm3), indicating an increase of 24.82 per cent from the level in the corresponding period of 2011.
CBN noted that the total volume of gas utilized was 28.08 MMm3, while total gas flared was estimated at 6.02 MMm3 indicating a decrease of 7.38 per cent from the level in the first half of 2011. The apex bank noted that Nigeria imported  3,288.10 million litres of Premium Motor Spirit (PMS), 366.69 million litres kerosene (DPK) and 454,26 petroleum products distributed during the period under review.

NEITI to Audit Excess Crude Account, Derivation Fund

The Nigeria Extractive Industries Transparency Initiative (NEITI) will commence a comprehensive and independent audit of the fiscal allocation and statutory disbursements of the extractive industries revenue funds from the federation account to Nigeria's three tiers of government.

The audit will amongst other objectives establish how funds from the account were distributed and received by the federal, state and local government councils.

A statement from NEITI in Abuja stated that the Federal Executive Council (FEC), presided over by President Goodluck Jonathan, approved the project at its last meeting on Wednesday, November 28.

NEITI said in the statement that the audit was equally designed to provide base line information and data to the three tiers of government on the basis of computation of who gets what, how and why.

It added that the exercise would also explain if each of the three tiers gets from the funds their actual due.

NEITI also noted that the audit is expected to review policies and procedures in the disbursement and utilization of extractive revenue funds by the three tiers of government and that major agencies to be covered by it include the Niger Delta Development Commission (NDDC), Petroleum Development Technology Fund (PDTF), Central Bank of Nigeria (CBN) and the Federal Government's share of derivation and ecology funds.

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.

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.