03 July 2012, Sweetcrude, Abuja – The management of the Nigerian National Petroleum Corporation, NNPC, on Tuesday denied reports in the media that the Corporation operates a secret and illegal foreign account.
The Group Managing Director of the NNPC, Andrew Yakubu, who made the denial while fielding questions from the Joint Senate Committee investigating the oil subsidy regime in Abuja, explained that the Corporation does not operate a secret account but a statutory domiciliary account with the Central Bank of Nigeria, CBN.
According to the GMD: “I can affirm that the record shows that the JP Morgan account is a domiciliary account operated by the CBN on behalf of the NNPC.
“This account was opened in 2002 by the CBN on behalf of the NNPC for the payment of proceeds from crude oil sales in US dollars. NNPC does not operate the account directly but through the CBN. JP Morgan is a correspondent bank for the CBN on NNPC’s domiciliary account. NNPC cannot give any instruction to JP Morgan directly, but through the CBN.”
On the crude swap arrangement by the Corporation, Yakubu noted that the NNPC has three avenues for the utilisation of the 445,000 barrels per day of crude oil it purchases from the Federal Government, they are: domestic refining, crude swap and offshore processing.
He added that these are business models it operates currently but is ready to review all the models in order to optimise the value it derives from the crude.
The GMD stated that it is best business practice to always review business processes and the Corporation will do the same to evaluate the profitability of the swap arrangement to the Corporation.
“As a business concern, we will continue to review our processes with a view to improving efficiency,” Engr.Yakubu said.
Speaking in a similar vein, the Managing Director of the Pipelines and Products Marketing Company, PPMC, Mr.Haruna Momoh revealed that as part of measures to mitigate kerosene scarcity in the country, the NNPC through the PPMC had ramped up supply of house- hold kerosene to 10.4million liters per day, to consumers, as at December 2011.
He however noted that this laudable effort by the NNPC was being challenged by the diversion of HHK to aviation, road construction, the manufacturing sector and smuggling at the expense of domestic use.