A Review of the Nigerian Energy Industry

Controversy as NNPC fingers CBN as owner of secret foreign account

Henry Umoru

04 July 2012, Sweetcrude, ABUJA — AT Tuesday’s resumed hearing of the Senate Committees on Petroleum Resources (Downstream), Appropriation and Finance investigating government’s fuel subsidy scheme, the Nigerian National Petroleum Corporation, NNPC, disassociated itself from ownership of the secret foreign account with American banker, JP Morgan.

This development at the Senate, has brought another dimension and controversy as to the true owners of the account, just as the Central Bank of Nigeria, CBN and the NNPC both denied ownership of the account especially the one with JP Morgan.

Following the drama, Chairman of the Joint Committees, Senator Magnus Abe, immediately ordered that the NNPC and CBN should go and reconcile, work out a formula for the closure of all foreign accounts into which proceeds of the sale of the nation’s crude oil were paid.

CBN opened account in 2002

Appearing before the committee, Tuesday, Group Executive Director, Finance of the NNPC, Mr. Bernard Oti, who told the Committee that the corporation had no relationship with JP Morgan, but the CBN, stressed that the NNPC only operated a domiciliary account with the CBN.

Oti who told the Senate Committee that the Morgan account was opened by the CBN on its behalf in 2002, said the CBN was the sole signatory to the account, adding that the bank could operate such account with its corresponding bank off shore.

It would be recalled that the Minister of Finance and Coordinating Minister of the Economy, Dr. Ngozi Okonjo-Iweala had on Monday distanced the ministry of having knowledge of the account.

According to Oti, “going by the records, the account was opened by the CBN in the last quarter of 2002. All correspondents and mandates relate only to the CBN. But the NNPC operates a dollar denominated account with the CBN and have no relationship with JP Morgan.”

When asked to be specific whether the NNPC or the CBN operates the account and whose money was paid into the account, the NNPC Executive Director told the Senators: “The money paid into the account is crude (oil) money of Nigeria. We are not party to that transaction. Our relationship with the CBN accounts begins and terminates with that account.

Also in his remarks, the NNPC Group Managing Director, Andrew Yakubu, reiterated also that the CBN was the owner of the account.

Not satisfied with the issues raised, the joint committee then told them that the Senate would design ways to ensure that accounts not known to the Constitution were legalised and thereby make it mandatory that all monies are paid directly into the Federation Account.

According to Abe, “NNPC and CBN should come up with a position on what we should do with the JP Morgan account and other foreign accounts used to receive payments for crude oil sales in compliance with the Constitution, because we must bring all practices in the sector in line with the Constitution.”

A member of the committee, Senator Bernard Ayade, PDP, Cross River North who recommended that the accounts should be closed, stressed that those who engaged in this act of illegality must be identified and punished

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  • The controversy is very unnecessary. The NNPC requires to operate foreign accounts for the purposes of engaging in international trade in crude oil and the procurement of whatever is required to run the refineries, maintenance of pipelines and gas plants. We want to believe that this controversy could have been avoided if the Senate took the time to ask the relevant bodies – CBN and the office of the Accountant General of the federation, rather than make a public show of its purported findings. Nigeria is beset with deeper problems and the government including the executive, legislature and judiciary owe a duty to deal with real and not perceived or contrived problems.