A Review of the Nigerian Energy Industry

$49.8b Crude money: NNPC accuses Sanusi of playing politics

CBN-Sanusi Lamido Sanusi*Says CBN signs off reconciliation process
*Minister orders audit of NNPC accounts

Oscarline Onwuemenyi

14 December 2013, Abuja — The management of the Nigerian National Petroleum Corporation, NNPC, on took the Governor of Central Bank of Nigeria, CBN, Lamido Sanusi to task over the alleged unremitted $49.8b crude oil fund, questioning why he has decided to bring up the issues so close to the 2015 elections.

Group Managing Director of the corporation, Andrew Yakubu who spoke in a briefing in Abuja to newsmen accused the CBN Governor of playing politics, even as he disclosed that the Central Bank signs off on all reconciliation process of the nation’s crude sales, a system that also involves the Federal Inland Revenue Service, FIRS, and the Department of Petroleum Resources, DPR.

Meanwhile, the NNPC GMD has confirmed that the Minister of Petroleum Resources, Mrs. Diezani Alison-Madueke has commissioned an audit of the corporation’s operations, explaining that the audit was a regular one that NNPC undergoes every year.

Speaking specifically on the issue of the non-remittance of crude oil fund, Yakubu stated that the NNPC has fully met its statutory remittance of crude sales within the period said “on the issue of $49.8 billion or 76 per cent of total national lifting’s and the alleged unremitted funds, we would like to clarify that this represents the balance of other streams.”

According to him, “The allegation is unfounded, baseless and has become a political instrument in the current politically charged environment. We are taken aback because in my presentation, you saw clearly that there is hardly any operation that the NNPC does alone; it is a multi-agency transaction and right from our production containment and entitlements meetings, all the various agencies that are involved in crude oil production are involved in the meetings and reconciliation is done with lifting numbers agreed and signed off before the lifting of our crude oil.

“Operations at the terminals are also done by all the various agencies and particularly championed by the regulatory agencies who are the arbiters of numbers and superintend over the process.

“NNPC is not a sole player in the entire business of the oil and gas value chain, so our functions are purely professional and we also have avenues to reconcile from time to time and we have no option whatsoever to determine the reconciliation of the numbers and our operations with all other agencies.

“So really for us, we are taking aback that this issue that came up about four months ago; in fact, we made our clarification through our honourable minister of petroleum resources four months ago and for it to surface at this time that the political atmosphere is charged, we find it difficult because we are also taken aback and it is left for you journalists to do your investigations and unravel the reasons behind all these”, he added.

He noted that all the “documents are there and the data was collated from them. I will not say that the CBN is not aware of all these because they are always at the documentation and reconciliation meeting; they also signed off on the documents that is why I will continue to say that we are all dumbfounded because we are always available for any form of clarification by any agency of government and particularly that the honourable minister ordered this audit months ago before we even got the letter from the CBN.

“You can imagine that the letter came four months ago and it took a snapshot of 18 months, so why would we wait for 18 months before we write a letter of a very serious issue like this; $49 billion is not a small money; it is an amount that can even shake the US economy and not one that you can just stock under your shelves and that is why we always make sure that our records are always intact”.

The other streams, he said are the FIRS and the DPR which he said has the balance of the funds arising from Royalty oil and Tax oil which is paid into their respective accounts and managed by the CBN.

He said: “All NNPC crude oil lifting’s is made up of equity crude, royalty oil, tax oil, volume for third party financing and NPDC equity volume. Remittances of proceeds from the above liftings are made according to statutory and production arrangements.

“Accordingly, proceeds from equity crude is paid by NNPC into the Federation account which is held by the CBN. Proceeds from royalty oil is paid to DPR whose designated account is managed by the same CBN, proceeds from tax oil or petroleum profit tax lifted by NNPC is paid directly into the FIRS account also managed by CBN”.

He further explained that “NNPC is by statutory requirement responsible for direct remittances of only one stream of lifting’s, namely equity crude… NNPC remitted its portion which is $18.48 billion (27.5%) into the federation account being the total proceeds from equity crude and gas sales of which CBN acknowledged receipt of $15.528 billion (24%).

“On the issue of $49.8 billion or (76%) of total national lifting’s and the alleged unremitted funds, these are remitted to the various agencies which are statutory empowered to collect and remit same into the federation account,” Yakubu explained.

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