NEITI Asks FG To Probe Utilisation Of $15.8bn NLNG Dividends By NNPC

NEITI Asks FG To Probe Utilisation Of $15.8bn NLNG Dividends By NNPC

The Nigeria Extractive Industries Transparency Initiative (NEITI) has called on the federal government to institute an independent investigation into the status and utilisation of all dividends and loan repayments by the Nigeria Liquefied Natural Gas (NLNG) Limited to the Nigerian National Petroleum Corporation (NNPC).

NEITI said the dividends and loan repayments amounted to $15.8 billion and were paid to the NNPC on behalf of the federation by the NLNG between 2000 and 2014.

According to the Executive Secretary of NEITI, Waziri Adio, who made the call in Abuja during an interactive session with journalists on NEITI’s latest policy brief, which examined the unremitted funds, the NNPC has stated several times that the funds were safely kept intact, but there was still need to investigate their current status.

Adio stated: “Since the Federation’s shareholding in NLNG is held through NNPC, dividends are paid to NNPC, which should remit same to the Federation. However, NEITI’s audits have revealed that until 2015, NNPC failed to remit the interests and dividends from NLNG to the Federation Account.’’

He added that the total outstanding dividends and loan repayments by NLNG to NNPC not remitted to the Federation account was $15.8billion, and that these payments were traced to NNPC accounts by its independent auditors but observed that there was no trace of NNPC’s remittance of the money to the Federation Account as required by sections 80(1) and 162 (1) of the constitution.

Adio also stated the need to investigate the NNPC’s management of the 445,000 barrels per day (bd) domestic crude oil allocation for its refineries in Kaduna, Warri and Port Harcourt.
He said there were concerns that earnings from the daily allocation of 445,000bd for domestic use have not been properly accounted for.

“First, the refineries have been operating at below full capacity for a long time and currently process less than 100,000 barrels per day. Between January 2015 and September 2016, NNPC lifted a total of 245.4 million barrels of crude oil for domestic use.

“Out of this total, only 24.7 million barrels were delivered to the refineries. This represents a mere 10.06 per cent of the total crude oil lifted for domestic use for that period. The remainder of this allocation was exported through a variety of channels: 64.8 million barrels or 26.4 per cent were exported directly, 97.6 million barrels or 39.77 per cent were sold under the Offshore Processing Agreements (OPA), and 58.29 million barrels or 23.75 per cent were sold under the Direct Sales- Direct Purchase (DSDP) scheme,” he stated.

He maintained that concerns raised in NEITI’s audits and by other stakeholders about the inefficiency of these arrangements, especially the OPA, led to its discontinuation in April 2016.
He, however, explained: “NEITI audits have shown that earnings from transactions arising from domestic crude allocation have not been fully remitted to the country’s treasury. Between January 2012 and July 2013, total revenue for domestic crude sales was $28,215,731,691 but NNPC only remitted $14,542,654,329.’’

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