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NNPC debunks CBN’s $49.8bn diversion claim

By The Rainbow
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The Nigerian National Petroleum Corporation (NNPC) has said that the  report credited to the Governor of the Central Bank of Nigeria (CBN), Mallam Sanusi Lamido Sanusi, where he alleged that it withheld the sum of $49.8 billion representing about 76 per cent of the total crude oil revenues from January 2012 to July 2013 was not only  false but misinformed.

Coming just short of calling the CBN governor ignorant of the basic operations of Nigeria's oil industry, the NNPC said the allegation by the CBN was borne out of its misunderstanding of the workings of the oil and gas industry and the modality for remitting crude oil sales revenue into the federation account.

The corporation's reaction is contained in a statement by its General Manager, Media Relations Department, Dr. Omar Farouk Ibrahim, in Abuja on Tuesday.

Sanusi had alleged in a letter to president Goodluck Jonathan which was scooped by Sahara Reporters that the NNPC  failed to remit a whopping $49.8 billion ( an amount more than Nigeria's annual budget) between 2012 and 2013.

The CBN in the letter complained to the  President about the continuing refusal of the NNPC to honour its legal obligations, including failure to remit $49.8 billion to the Federation Account between 2012 and 2013, which  represents 76% of the value of crude oil lifting during the period.

The letter is dated 25 September 2013.
But Ibrahim said that  contrary to the CBN’s claim that it lifted about 594.024 million barrels of crude oil between January 2012 and July 2013, the actual crude oil lifted within the period was 618.55 millon barrels and that the CBN had under-quoted the figures.

“For the avoidance of doubt, it needs to be stated that the figure of 594.024 million barrels of crude oil given by the CBN as the total crude oil lifting for the period of January 2012 to July 2013 does not represent the correct picture of crude oil lifting for the period,' he said.

'From our records, the correct figure is 618.55million barrels. This shows that the CBN understated the actual crude lifting by 4.13 per cent.”

Ibrahim went into a breakdown of how accretion to the Federation account from oil oil operations is captured, saying that revenues from crude oil lifting are in various categories, namely equity crude, Petroleum Profit Tax (PPT), royalty, third party financing and the Nigerian Petroleum Development Company (NPDC).

He said that revenues from each of these categories are statutorily collected by different agencies of the government and that the NNPC collects only one of the aforementioned categories, namely equity crude.

He said that by existing arrangement  Petroleum Profit Tax is collected by the Federal Inland Revenue Service (FIRS), royalty goes to the Department of Petroleum Resources (DPR), third party financing goes for research, development, programme and satellite fields development, while NPDC goes to NPDC for upstream development.

He said,  ”While NNPC pays proceeds from equity crude directly to the federation account with the CBN, the FIRS and DPR pay PPT and royalty respectively into the federation account with the CBN.

The sum total of these proceeds make up the alleged unremitted revenues.” “The 24 per cent of total crude oil revenue receipts which the CBN governor is reported to have acknowledged that NNPC remitted represents the proceeds from the equity lifting which NNPC is directly responsible for.

The alleged unremitted 76 per cent was paid to the agencies that are statutorily empowered to receive them for onward remittance into the federation account,” Ibrahim added.

The general manager  stressed the need for institutions of the federal government and top government functionaries to seek understanding of issues that are not clear to them from relevant agencies rather than go public with misleading information that is capable of creating public disaffection.

He said that the NNPC is available at all times to meet with all relevant stakeholders to clarify such issues.