A Review of the Nigerian Energy Industry

$49.8bn not missing, $10.8bn still unaccounted for – Okonjo-Iweala

Sanusi Lamido Sanusi & Ngozi Okonjo-Iweala*Crude production now 2.38bpd
 Oscarline Onwuemenyi
18 December 2013, Sweetcrude, Abuja – Minister of Finance and Coordinating Minister of the Economy, Dr. Ngozi Okonjo-Iweala, on Wednesday, doused the raging controversy over the alleged missing $49.8 billion of crude sales, noting that the money has been “substantially”accounted for.
Dr. Okonjo Iweala however acknowledged, that between the period of January 2012 and July 2013, a shortfall of $10.8b has been agreed to by the NNPC, adding that the magnitude was still in dispute.
The Governor of the Central Bank of Nigeria, Mallam Lamido Sanusi had accused the Nigerian National Petroleum Corporation, NNPC, of not remitting $49.8 billion to the Federation Account, leading to rounds of accusations and counter-accusations between the institutions.
Okonjo-Iweala, who was speaking at a joint briefing with the Minister of Petroleum Resources, Diezani Alison-Madueke, NNPC Group Managing Director, Andrew Yakubu and Mallam Sanusi in Abuja, declared that the $49.8b is not missing.
According to her, “What we have done so far shows that for the $49.8 billion, and that sinter first point we want to make, there are some, perhaps misconceptions or misunderstandings that led to this number and we have been able to come to the conclusion that we can account for this amount.
“The second point is that within this, yes, there are some shortfalls that both the NNPC and the ministry of finance have been working on for quite some time and even the CBN as an ongoing matter and we will come to that through the FAAC committee. And we will address that.
“But the first point is the $49.8billion, to clarify that we have been able to account for this amount.
“We have been able to get to the bottom of the $49.8billion that was indicated in the CBN memo. But also due to the way that the accounting for the crude was read, some of it that was being lifted for, other parties to the tune of $24billion was said to be missing but it has been accounted for.
“So the bulk of the sum of $49billion has been accounted for and that is what the reconciliation exercise is about. So it is very clear that this is not missing.”
Okonjo-Iweala also pointed out that both finance and NNPC have been in discussions to reconcile the differences, adding that “we do so every month after FAAC we reconcile our figures, it is not an easy thing. In the course of the reconciliation, from Jan 2012 to July 2013, we have looked at a shortfall of about N1.7 trillion, the equivalent of $10.8billion.
“That is the amount that we have been discussing and of course NNPC has been disputing some of it. But it an ongoing reconciliation. We will still continue, we do it every month. We will continue our work after now until we can come to terms of what is actually the shortfall and what is due to come to the federation account,” she explained.
She noted that “according to the NNPC’s records, the total revenues of $67.12b was comprised of revenues directly accrued to NNPC (for federation account) of $14b; and additional revenues lifted by NNPC on behalf of other parties as follows: for FIRS($15b), for DPR ($2b), for NPDC ($6b) and for other third party financing ($2b).
“In addition, domestic crude lifted by the NNPC amounted to about $28bb. This domestic crude component was not reflected in the CBN’s foreign accounts, but rather paid directly in Naira into the federal account. Taking account of these various exports conducted on behalf of the non-NNPC parties, the total of $67b was mostly accounted for. This substantially addresses the issues raised by the CBN”.
Sanusi states reason for the letter
Speaking on the circumstances under which the letter was written to the President Goodluck Jonathan, Sanusi explained that the CBN never issued a public statement or a press statement in this matter.
He said: “The CBN wrote a letter to the president which unfortunately found its way to the press and that letter was at best an invitation to begin investigation. It was not an end or a conclusion of an audit or investigation. Conclusions drawn before investigation were premature.
“What was the context? We have been concerned along with Finance minister at the decline in excess crude despite the fact that oil prices are high. We were concerned about what we saw as a gap between what we had in our records as the value of crude shipped by NNPC and the amount repatriated as equity to the federation account.
“What we had in our records was $65billion shipped by NNPC and about $15billion returned as equity to the federation account. After the letter, the President asked for this meetings and we have discovered the following: That out of the $65billion that NNPC shipped, $24billion did not belong to NNPC, it was crude that was paid by oil companies as tax and royalties and shipment for them from NPDC and so on. So that explains half of the sum.
“The outstanding issues are with the $28billion domestic crude which has been taken by NNPC, from out records we have received $16billion, there is a shortfall of $12billion and we are told that that shortfall has always been a part of an ongoing discussion with Finance and Petroleum and NNPC. So this is where we are. Finance, NNPC, all parties are going to try to resolve this matter”.
On her part, Mrs. Alison-Madukeke noted that government take in the petroleum business has been on the decline due to crude oil theft, but assured that government efforts at combating the crime have started yielding results with crude production now at 2.38m barrels per day.
“So I think in terms of our efforts, we have already over the last two weeks seen an increase from a drop to 2.20 million bpd to what is today 2.38 million bpd, and if we can keep up this level of progression, we should see it sustained and hopefully increased. Let me also add that the ministry of petroleum resources and NNPC have always participated in the curtailment and reconciliation meetings along with other stakeholders and that will continue and will hopefully get even more aggressive.
“The expectation of course is to ensure that the full benefit of oil is received and sustained for the benefit of all Nigerians,” she added.
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