The Senate Wednesday set up a nine-man ad-hoc committee that would look into the report of the Nigeria Extractive Industry Transparency Initiative (NEITI) 2013 report which indicted the Nigerian National Petroleum Corporation (NNPC) of not remitting over N1trillion to the Federation Account.
Senate President, Bukola Saraki who presided over plenary where NEITI, Executive Secretary, Waziri Adio appeared to present the report said the committee’s responsibility was to re-examine the financial processes and fiscal audit report of the NEITI; the financial loss and leakages to government; remedial measures and sanctions where necessary.
The committee chaired by the acting chairman, Senate Committee on Downstream Petroleum Jibrin Barau, also has Andy Uba as Vice Chairman as well as Tayo Alasoadura, Bassey Akpan, John Enoh and Chukwuka Utazi as members.
Other members are: Kabir Marafa, Solomon Adeola and Bukar Mustapha. The committee was given four weeks to submit its report.
In his presentation, Adio lamented the level of mismanagement of resources in the oil and gas industry over the years and said that the country has no definite account of the oil produced over the period.
This, he stated, has implication for the nation’s funds and security.
He said the NEITI 2013 Industry audit report showed that revenue in the oil and gas industry were not fully remitted to the Federation Account, adding that the danger posed on the economy due to the misappropriation of these funds were enormous.
“Nigeria only know what it exports but not what it produces in crude oil sector. This has implication for national funds and security”, he told the Senate in plenary.
According to him, 41 oil and gas companies and 16 government agencies were audited for the 2013 oil and gas audit cycle.
Adio alleged that some huge amount of monies, which were in three tranches, were either withheld, lost or underpaid for different reasons.
NNPC, he said, did not obey normal procedure and under-accessed, hence made the country lose $599.8 million.
Adio said his agency had perfected all arrangements to forward all its reports to the anti-graft agencies in the country, even as he lamented that nobody had been convicted since 2007 when the Act establishing NEITI was signed into law.
His words: “The first is in the category of the unremitted, which amounted to $3.8 billion and N358million; the second category is the category of losses, due to inefficient practices and theft totalling $5.9billion and N20billion.
“When we look at the unremitted, $1.7bn is still being owed the federation for Oil Mining Licences. Also, outstanding are the $1.29billion from the Nigerian Liquefied Natural Gas dividends and N351billion from unpaid domestic crude debt while N2.17billion was from cash calls refunds.
“Those are the monies we have established that should have been paid to the federation and were not paid. The second category of losses by NNPC and its subsidiaries. Out of the $5.9 billion that we lost, $4.7billion was lost to theft and vandalism.
“About N20billion was lost because the NNPC did not observe the 90 days credit grace and when you look at the time value of money, if you calculate at 12 percent interest, the country lost N20billion”.
He said some of the issues contained in the report included assets diversion by NNPC to NPDC, stressing that the NNPC between 2010 and 2011, divested eight assets that belonged to the federation to its upstream subsidiary, the NPDC.
“NNPC divested 55 percent of the shares being held on behalf of the federation to the NPDC. These eight OMLS are valued at $1.8 billion by the Directorate for Petroleum Resources.
“NPDC paid only $100million out of the $1.8bn meaning there is an outstanding of $1.7bn and even that $100 million was paid two years after. What this means is that NNPC lifted oil on behalf of NPDC not on behalf the federation.
“This is despite the fact that NPDC has not fully paid for those assets. Another issue that came out of the audit is the NLNG dividend. NLNG in 2013 paid $1.28billion but the money was not remitted to the federation account.
“Beyond this, between 2005 and 2013 NLNG paid $12.9 billion to NNPC and NNPC acknowledged receiving it but the money was not remitted to the federation account. Another is the losses incurred from SWAP and Oil Prospecting License.
“This is the arrangement where NNPC exchanges crude for product and the country lost $518million due to the inefficiency of the SWAP and OPL. $211million was lost to product swap and $306million was lost to OPL.
“N1.3trillion was posted for petroleum subsidy in 2013. It was 30 percent higher than the total for budget education, health, water and SURE-P. We found out that we have infrastructural deficit in the country and can only say what it exports and cannot say authoritatively what it produces.
“This has always been an issue and the audit confirms that we still don’t have meters where we should have them. This lack of metering has serious implication for revenue and national security.”
“In the 2013 report, I have 10 major points from oil and gas audit and a few on the solid minerals. In 2013, the country produced 800.3m barrels and out of that the country made $58.07 billion and that represents an 8 percent reduction on the $62.9 billon that the country made in 2012.
“In the federation, in 2013 made N33.8billion from the solid minerals sector which represented 37 percent increase in what the country made in 2012”, he said.
OWEDE AGBAJILEKE
