Nigeria's NNPC Has Not Accounted For $50 Billion In Oil Sales - Central Bank of Nigeria

 

Nigeria's state-energy company NNPC hasn't accounted for nearly $50 billion in revenue from the sale of crude oil which should have been paid into government accounts under law, the central bank (CBN) has said.

CBN Governor Lamido Sanusi said in a letter dated Sept. 25 to President Goodluck Jonathan that NNPC earned $65.3 billion from crude oil sales between January 2012 and July 2013 but only remitted 24 percent of this to the federation account and $49.8 billion was still outstanding.
"I am constrained to formally write your Excellency, documenting serious concerns of the CBN on the continued failure of the NNPC to repatriate significant proportions of the proceeds of crude oil shipments it made in gross violation of the law," the letter said.
NNPC has been criticised for lacking transparency and for diverting funds in several investigations in recent years but the central bank governor appears to be one of the most high-profile figures to have brought up the issue with Jonathan.
CBN sources confirmed the letter was genuine. The CBN spokesman said he could not comment on private correspondence and Sanusi did not respond when contacted for comment.
A senior source at the presidency said Jonathan received the letter and had asked the head of NNPC to give him an explanation.
"The allegation is borne out of misunderstanding of the workings of the oil and gas industry and the modality for remitting crude oil sales revenue into the Federation Account," said an NNPC statement issued in response on Tuesday.
NNPC said it had remitted its oil sale proceeds but the missing funds should come from other government departments who are responsible for petroleum tax and royalties, while other funds will have been spent on field development.

Sanusi's letter says the missing $49.8 billion is from the value of oil NNPC sold and makes a distinction with taxes. It says under law NNPC must submit all oil export proceeds.
"As an indicator of how bad this situation has become, please note that in 2012 alone, the Federation Account received $28.51 billion in Petroleum Profits and related taxes but only $10.31 billion from crude oil proceeds," the letter said.
NNPC sold 46 percent of Nigeria's oil between January 2012-July 2013 but its remittance amounted to only one-third of the taxes paid by oil companies that exported the other 54 percent, the letter claimed.
NNPC exports Nigeria's share of around 2-2.5 million barrels per day of oil the country produces, mostly in joint ventures with oil majors like Royal Dutch Shell, Exxon Mobil , Italy's Eni and Chevron.
Crude exports and taxes earned from these oil majors account for around 80 percent of government revenues in Africa's second largest economy and top oil producer.
A probe last year by the former head of Nigeria's anti-corruption body, Nuhu Ribadu, recommended an overhaul of NNPC because it lacked transparency in the way it sold oil, wielded too much power and was a vehicle for corruption.
Jonathan set-up a committee to investigate the findings of the probe but the panel's report was never made public. Oil Minister Diezani Alison-Madueke denied at the time that there was a problem with corruption within NNPC.
A report in 2011 by Transparency International and Revenue Watch found NNPC to have the poorest transparency record out of 44 national and international energy companies it evaluated.



















Reuters.