December 14, 2013

Non-remittance of $49.8 bn: NNPC says Sanusi playing politics

Non-remittance of $49.8 bn: NNPC says Sanusi playing politics

CENTRAL Bank of Nigeria (CBN) Governor, Sanusi Lamido Sanusi


CENTRAL Bank of Nigeria (CBN) Governor, Sanusi Lamido Sanusi

ABUJA: The allegation of non-remittance of $49.8 billion oil revenue made the Nigerian National Petroleum Corporation, NNPC, by the Governor of Central Bank of Nigeria, CBN,Sanusi Lamido Sanusi took a new dimension on Friday as the Corporation accused the CBN Governor, Sanusi Lamido Sanusi, of turning the issue into a political instrument.

Group Managing Director, GMD, of the NNPC, Engr. Andrew Yakubu, described the CBN allegation as unfounded and baseless because the apex bank has always been a major player in the oil and gas value chain.

Nothing that the NNPC was not a sole player in the business of oil and gas value chain, Engr. Yakubu named CBN, FIRS and DPR as members the that meet regularly to reconcile liftings, sales and remittances of oil proceeds, adding “We meet on a monthly basis and all the players are always there and they all sign up on this”.

He said “In fact our data was compiled from signed up documentation. I will not say the CBN was not aware because they are always at the meeting and they also sign up the documentation and reconciliation documents”.

According to him, “I want to say clearly that the allegation is unfounded, it is baseless and it has become a political instrument in the current politically charged environment. And I will consider it as an attempt to ridicule NNPC staff and the management of NNPC.

“We will continue to keep our operations in high integrity and transparency and we are available at any point in time to reconcile numbers as we do in our operations.”

Engr. Yakubu spoke further, “as you are well aware, it is not in our character to join issues or trade blames with other agencies of government. But considering the high level of publicity that the recent letter from the Governor of the Central Bank of Nigeria, CBN, to the President has generated, and the erroneous impression it has created among Nigerians. It has become necessary to set the records straight.

“The statement credited to the CBN Governor that NNPC has failed to remit the sum of $49.8bn representing 76% of total national oil receipts is borne out of a surprising lack of understanding of how revenues from crude oil sales are remitted into the Federation Account.

“I will therefore explain the process and put the figures in perspective in order for you to understand and let the world know that NNPC is not in the business of withholding any crude oil receipts due the Federation Account or any other statutory remittances.”

Yakubu explained further that “”all NNPC crude oil liftings is made up of the following; Equity Crude, Royalty Oil,Tax Oil,Volume for Third Party Financing, and NPDC equity volume. “It is important to stress that remittances of proceeds from the above liftings are made according to statutory and production arrangements.

“Accordingly, proceeds from Equity crude is paid by NNPC into the Federation Account which is held by the Central Bank of Nigeria. Proceeds from Royalty oil is paid to Department of Petroleum Resources, DPR, whose designated account is managed by the same CBN.

“Similarly, the proceeds from Tax Oil or Petroleum profit Tax lifted by NNPC is paid directly into the Federal Inland Revenue Service, FIRS, account also managed by the CBN.

“It should now be clear to all that NNPC is by statutory requirement responsible for direct remittances of only one stream of liftings, namely Equity Crude.”

“Analysis of the figures is as follows; the CBN letter claims that for the period 1st Jan 2012 to 31st July 2013, total National crude oilliftings was 1.287 billion barrels. Our records show that the total national crude lifting for the same period was actually higher at 1.330 billion barrels. Furthermore, total NNPC liftings during the same period was again higher at 618.552 million barrels as against the 594.024 million barrels stated by CBN.

“We further wish to state that the proceeds from the total NNPC liftings comprising Federation Equity, Royalty Oil, Tax Oil, Volume for Third Party Finance and NPDC equity amount to US$67.12bn as against the $65.33bn that the CBN stated.

“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%).
At this point, we wish to categorically state that all the proceeds from NNPC have been remitted as statutorily required.

“On the issue of US$49.8 billion or 76% of total nationalliftings and the alleged unremitted funds, we would like to clarify that this represents the balance of other streams as stated above. These, as I stated earlier, are remitted to the various Agencies which are statutorily empowered to collect and remit same into the Federation Account.

“F or the benefits of those who may not be aware of the workings of the industry, it is imperative to state that the CBN, NNPC, FIRS and DPR meet regularly to reconcile liftings, sales and remittance of proceeds. Therefore, the data presented are jointly reconciled by CBN, NNPC, FIRS, and DPR.

“The current position is that NNPC has paid a total of $114.78 million from inception of NESS in 2009 up to October 2013 as against the total, budget of $117.08 million for the same period. These payments have been reconciled with the CBN, who are again the custodians of the NESS account that is operated on a draw-down basis by the CBN.

“NNPC hereby states that in carrying out our statutory duties we will continue to maintain the highest level of transparency and accountability. Please be assured that NNPC remains available at all times to provide clarifications on these issues or any other matter relating to our responsibility to the Federation and the Nigerian people.