A Review of the Nigerian Energy Industry

$49.8bn oil money: Uneasy calm trails reconciliation meeting

Sanusi-Lamido-Sanusi-354x33019 December 2013, Abuja -Uneasy calm reigned yesterday as the outcome of the high level meeting between the Nigerian National Petroleum Corporation (NNPC) and the Central Bank of Nigeria (CBN) and related government agencies ordered by President Goodluck Jonathan over the $49.8 billion unremitted crude oil revenue was delayed as the meeting dragged into the night.

LEADERSHIP gathered that President Jonathan had ordered the Central Bank of Nigeria (CBN), Nigerian National Petroleum Corporation (NNPC), and the Federal Inland Revenue Service (FIRS) to meet to reconcile their accounts on crude oil revenues.

However, the meeting which sources said held at the NNPC headquarters in Abuja yesterday, was still on as at the time of filing this report.

The issue of the missing $49.8 billion crude oil revenue has generated a lot of controversy since it first became public last week, in view of its significance on the nation’s revenue which has been dwindling in recent months.

A letter purportedly written by the Governor of CBN Mallam Sanusi Lamido Sanusi, to the President had alleged that the Nigerian National Petroleum Corporation (NNPC) failed to remit $49.8 billion, being proceeds from crude sales between January 2012 and July 2013 to the Federation Account.

LEADERSHIP sources said the presidency conceded the fact that the letter was weighty enough to merit a high level meeting of the agencies of government that are connected with crude oil sales and how the proceeds are managed.

The said amount represents 76 per cent of the value of crude oil lifting during the period, in which the NNPC was said to have remitted $15.5bn, representing a paltry 24 per cent of the total value of $65.3bn.

But, the NNPC was quick to deny the report credited to Sanusi, saying that the allegation was borne out of misunderstanding of the workings of the oil and gas industry and the modality for remitting crude oil sales revenue into the Federation Account.

The group managing director, Mr. Andrew Yakubu, said the NNPC met its statutory remittance of crude sales within the period, adding that, “On the issue of $49.8bn or 76 per cent of total national lifting and the alleged unremitted funds, we would like to clarify that this represents the balance of other streams.

The other streams, he said, are the Federal Inland Revenue Service (FIRS) and the Department of Petroleum Resources (DPR), which he disclosed had the balance of the funds arising from royalty oil and tax oil, which is paid into their respective accounts and managed by the CBN.

Yabubu said, “All NNPC crude oil lifting 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 lifting are made according to statutory and production arrangements.

“Accordingly, proceeds from equity crude are paid by NNPC into the Federation Account, which is held by the CBN. Proceeds from royalty oil are paid to DPR, whose designated account is managed by the same CBN; proceeds from tax oil or petroleum profit tax lifted by NNPC are 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, namely equity crude.”.. NNPC remitted its portion, which is $18.48bn (27.5%) into the Federation Account, being the total proceeds from equity crude and gas sales, of which CBN acknowledged receipt of $15.528bn (24%).

“On the issue of $49.8bn or 76% of total national lifting and the alleged unremitted funds, these are remitted to the various agencies.”


– Leadership

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