NNPC frustrating collection of signature bonus — NEITI

*NNPC Towers.

*NNPC Towers.

Ike Amos

04 June 2016, Sweetcrude, Abuja — The Nigerian Extractive Industries Transparency Initiative, NEITI, has accused the Nigerian National Petroleum Corporation, NNPC, of frustrating the collection of signature bonus from oil and gas companies by the Department of Petroleum Resources, DPR.

NEITI, in the 2013 Oil and Gas Audit Report released on its website, accused the NNPC of hoarding information concerning the date Production Sharing Contracts, PSC, are entered into, creating a stumbling block for the DPR in collecting signature bonus.

The report said, “DPR is responsible for collecting signature bonus. NNPC however, does not inform DPR of the date of signing of each PSC to ensure that all committed signature bonuses are collected.

“This created difficulties in obtaining reliable and comprehensive information on the arrears of signature bonus.”

However, to address this irregularity, NEITI said the DPR has established adequate accounting system to manage all signature bonus commitments entered into by companies, while it added that though Signature Bonus was not paid by any Entity in 2013 because there was no bid round, Sigmund Oilfields Limited paid $12.5 million as signature bonus with respect to Oil Mining Lease, OML, 2012.

The NEITI also lamented the disparities in production lifting volumes between the NNPC and the DPR, stating that the recurring lack of reconciled positions between the records of NNPC and DPR puts doubt on the integrity of production and lifting figures and raises issues of accountability.

The report said, “In the course of carrying out validation and reconciliation of Production and lifting volumes between the records of NNPC and DPR, it was noted that a difference of 538,000 barrels (bbls) and 589,000 bbls exists in aggregate production and lifting volumes respectively.

“This is a serious issue in the sense that: The JV companies signed off all reconciled production figures with DPR and NNPC separately for the same period. Ideally, there ought to be no difference in the production volumes presented by NNPC and DPR as they were duly reconciled with the JVs. However, the volumes presented by NNPC and DPR are different in most cases.

“Also, in some instances. there were more than one reconciled production volume duly signed off by both DPR and the companies for the same period. For example DPR and Chevron jointly signed off 74,228,949 bbls (2nd December, 2014 – Operator’s Date and 17th November, 2014 – DPR’s Date ) and 74,879,296 bbls (3rd December, 2014) as production volumes for Escravos crude type as well as 2,638,334 bbls (3rd December, 2014) and 2,638,681 bbls (3rd December, 2014) as production for Pennington crude type in separate documents.

“It is worthy of note that the reconciliation of 2012 and 2013 production and lifting volumes between DPR and the companies did not take place until August 2014. The signed off for production volumes was only done by both DPR and the JV companies without NNPC, a partner in the JV.”

NEITI said the differences between DPR and NNPC figures also accounted for the differences between audit figures which are based on NNPC records and the companies reconciled figures with DPR.

To this end, NEITI called on the stakeholders — NNPC, DPR, and the oil companies — to ensure timely, periodic and joint reconciliation of production and lifting volumes and update records accordingly.

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