14 December 2016, Abuja — THE Federal Government, yesterday, accused International Oil Companies, IOCs, operating in Nigeria of falsifying gas flare data to cut down on payment of penalties, as a result of which the country is losing between $500 million and $1 billion in revenues that would have accrued from the penalties. This was even as Minister of Power, Works and Housing, Mr. Babatunde Fashola, disclosed that Nigeria’s perennial power problems are man-made and not as a result of technical challenges.
Meanwhile, the Senate is probing non-remittance of $3.48 billion by NNPC and NPDC from 2013 to date just as the House of Representatives is probing Oando, Mobil oil, Total oil and others over N500bn debt to the PPMC.
How IOCs falsify gas flare data
Speaking at the Gas Competence Seminar in Abuja, Minister of State for Petroleum Resources, Dr. Ibe Kachikwu, faulted reports that the country is currently recording only 10 per cent non-compliance in terms of gas flaring. “These numbers are very mistaken. Beginning next year, we will be putting up an independent tracking mechanism, not relying on figures from the IOCs, to find out really what the actual flare volume is. My feeling is that there is a lot of management of those figures to suit the cap of penalties that are being charged. “My take is that we lose over half a billion to a billion dollars of government revenue, looking at the basis of the present penalties position. Nobody is effectively monitoring the volume. When you actually go into the real effect of what is flared, in terms of statistics, it is much higher than that figure, he said.”
Kachikwu emphasised the need for the country to commercialise its gas resources, stating that crude oil alone cannot sustain Nigeria’s economy. According to him, ensuring gas commercialization, utilisation and transportation will go a long way in growing the nation’s economy. Kachikwu maintained that the Federal Government and other stakeholders must find a way of putting enough incentives for operators to enable them to take gas to ultimate users. Lamenting the huge volume of gas flared on a daily basis, he said it is extremely disgraceful that the country still grapples with power problems in spite of her enormous gas resources.
Gas flaring, sabotage cause of our power problems – Fashola
Also speaking, Fashola said Nigeria’s perennial power problems are man-made, adding that in the last couple of days, gas flaring and most especially, sabotage has deprived most of the country’s critical gas power plants of gas, thereby leading to a significant decline in power supply across the country. Decrying the acts of sabotage and its attendant effects, Fashola stressed the need for all Nigerians to have a rethink and react.
Noting that Iran, a major gas flaring country like Nigeria in 1984, was able to discontinue the practice 21 years after, despite the fact that it was under sanctions for most parts of those years, he wondered why Nigeria, which is not under sanctions is unable to curb gas flaring. “The claim by oil companies in Nigeria that flared gas is leaking fumes, brings us to ask if any of us would be able to drive our car if it is leaking fuel,” he added.
FG discovers N2.2trn unrecorded debts
Also, the Federal Government, yesterday said it has found unrecorded debts of 2.2 trillion Naira ($7.22 billion) left over from former President Goodluck Jonathan’s administration, following an audit aimed at improving transparency. In a statement, Finance Minister, Mrs Kemi Adeosun, stated that the debts were owed to contractors, oil marketers, exporters and electricity distribution companies, and will be settled by issuing a 10-year promissory note.
Senate probes NNPC, NPDC
Meanwhile, the Senate has accused the Nigerian National Petroleum Corporation, NNPC and the Nigerian Petroleum Development Company, NPDC of unlawful and willful misappropriation of public revenue to the tune of $3.487 billion. Against this backdrop, the Senate, yesterday, mandated its Committees on Petroleum Resources ( Upstream) and that of Finance to urgently carry out a holistic investigation into the alleged level of corruption in the corporation, with a view to recovering every fund due to the Federation Account and to tell the Senate where the monies are when it resumes on January 9, 2017. The lawmakers also asked the NNPC to immediately forward to the Senate its yearly estimate for repairs of pipelines for appropriation.
The upper chamber also asked the NNPC and the NPDC to immediately remit funds obtained on behalf of the Federal Government to the Federation Account upon lifting and for the GMD to ensure compliance with this directive with immediate effect. The Senate resolutions were the sequel to a motion by Senator Dino Melaye (APC, Kogi West), titled: “The unlawful and willful misappropriation and criminal withholding of public revenue by the NNPC and NPDC from 2013 to date.” Senate President, Bukola Saraki, who condemned the failure of some government agencies to remit huge sums of money to the Federal Government, asked the committees to ensure they report to the Senate when it resumes January 9, 2017, where these monies were kept.
He said: “Let me join all those that have commended Senator Dino Melaye for bringing this very important motion. I believe that as part of our own legislative agenda, we must put an end to this kind of misappropriation and recklessness. He wondered how the Minister of Petroleum, the GMD (NNPC), the Auditor-General, the Minister of Finance, the Governor of Central Bank and the anti-corruption agencies could allow the trend to continue. Earlier in his motion, Senator Melaye decried ‘’the unlawful and willful misappropriation and criminal withholding of public revenue by NNPC and NPDC from crude oil.
According to him, the way the two agencies of government have been carrying out crude oil lifting has not been transparent, and the Senate is “deeply concerned that since 2013 to date, NPDC has continued to lift crude oil from divested oil wells OML 61, 62 and 63 worth over $3.487bn without remittance of any nature to the Federation Account; the same NPDC has been lifting from divested oil wells OML 65, 111 and 119 to the tune of $1.847bn out of which it paid $100m only.”
Worried that while this practice may have started before the present Administration, Melaye said ‘’it has continued under the watch of the new Administration without abating so much so that in this year alone between January and August, a total of $344.442m worth of oil has been lifted by NPDC without remittance to the Federation Account and also not paying royalties and other taxes on these lifting.”
Contributing, Senator Mao Ohuabunwa (PDP, Abia North) and Senator Adeola Olamilekan (APC Lagos West), said the issue must be tackled seriously. Senator Olamilekan stressed that depriving the nation of the whopping sum of almost $4 billion by the two agencies at the time the government was seeking to borrow $30 billion must not go unpunished.
Reps probe Oando, Mobil oil, Total oil, others over N500bn debt to PPMC
In like manner, Speaker of the House of Representatives, Yakubu Dogara, yesterday inaugurated an ad-hoc committee to investigate huge debts of over N500 billion and alleged criminal acts of sabotage by oil companies. The inauguration was the sequel to a motion sponsored by Rep. Jarigbe Agom Jarigbe representing Ogoja/Yala Federal Constituency of Cross River State on the urgent need to investigate the huge debts owed to the Petroleum Products Marketing Company, PPMC, by some major and independent oil marketers. Jarigbe had said that there is a connivance and compromise by functionaries of PPMC to leave government funds in the hands of the marketers, thereby putting the country in dire financial straits. While inaugurating the ad-hoc committee headed by Abdullahi Gaya in Abuja, Dogara said that “the committee is basically a fact-finding one. It is expected to make findings that will lead to plugging the loopholes in existing laws and practices in the downstream sector of the Nigerian economy.’’
*Henry Umoru, Michael Eboh, Emma Ovuakporie, Johnbosco Agbakwuru, Joseph Erunke & Ediri Ejoh – Reuters