NNPC pays $607m, N723bn to FG in 8 months

…No dol­lar pay­ments made to Fed Ac­count in 5 Months

Daily Trust - - FRONT PAGE - By Daniel Adugbo

The Nige­rian Na­tional Petroleum Cor­po­ra­tion (NNPC) has dis­closed it has paid a to­tal of $607.8m (about N119.7bn) so far into the Fed­er­a­tion Ac­count Al­lo­ca­tion Com­mit­tee (FAAC), be­ing dol­lar pro­ceeds from ex­port of oil and gas be­tween Jan­uary and Au­gust 2015.

Within the same pe­riod, the Cor­po­ra­tion has re­mit­ted N723.82bn to the Fed­er­a­tion Ac­count as naira pro­ceeds from the coun­try’s do­mes­tic crude oil and gas sales.

The fig­ures brought to a to­tal of about N843.5bn monies that have been paid to the gov­ern­ment as pro­ceeds from ex­port and do­mes­tic oil and gas sales within the pe­riod.

These fig­ures were con­tained in NNPC’s Monthly Fi­nan­cial and Oper­a­tions Re­port re­leased over the week­end. The re­port de­tails the Cor­po­ra­tion’s ac­tiv­i­ties in the oil and gas sec­tor from Jan­uary to Au­gust this year.

The ex­ten­sive dis­clo­sure of fig­ures in NNPC’s ac­tiv­i­ties is the first by the Cor­po­ra­tion since 1999, and would seem to be a ful­fil­ment of the prom­ise made by the NNPC Group Man­ag­ing Di­rec­tor Ibe Kachikwu to es­chew trans­parency and ac­count­abil­ity through pe­ri­odic pub­li­ca­tion of the cor­po­ra­tion’s fi­nan­cial trans­ac­tions.

The re­port re­veals that while the coun­try earned a to­tal of $3.420bn (N673.7bn) from crude oil and gas ex­port (ex­clud­ing pro­ceeds from do­mes­tic crude sales) for the eight-month pe­riod, only $607.8m (N119.7bn) was paid to the Fed­er­a­tion Ac­count, while the bal­ance of $2.815bn (N554.5) was used to fund the JV Cash Call for the pe­riod.

Nige­ria’s earn­ings from her crude oil and gas trans­ac­tions are broadly sourced from lift­ings, which are broadly clas­si­fied into eq­uity ex­port crude and do­mes­tic crude. Both cat­e­gories are, how­ever, lifted and mar­keted by the NNPC and the pro­ceeds re­mit­ted to the Fed­er­a­tion Ac­count.

The re­port ex­plains that the fed­er­a­tion’s crude oil and gas monthly ex­port re­ceipts were paid di­rectly into a JP Mor­gan ac­count op­er­ated by the Cen­tral Bank of Nige­ria (CBN), af­ter ad­just­ing for cal­en­darised JV Cash Calls, be­ing a first-line charge as pro­vided in the Ap­pro­pri­a­tion Bill. The bal­ance was then trans­ferred to the Fed­er­a­tion Ac­count.

How­ever, no sin­gle dol­lar re­mit­tance was made into the Fed­er­a­tion Ac­count from pro­ceeds of its oil and gas ex­port in the last five months, the re­port also re­vealed.

The NNPC at­trib­uted the drop in its dol­lar con­tri­bu­tion to the Fed­er­a­tion Ac­count to the dwin­dling oil price which it said neg­a­tively af­fected rev­enues for the pe­riod.

The re­port dis­closes that the Fed­er­a­tion Ac­count last re­ceived dol­larised trans­fer from sales of ex­port crude oil, gas and Nige­ria Liq­ue­fied Nat­u­ral Gas (NLNG) feed­stock in March 2015.

“The re­ceipts wit­nessed a sharp de­cline of more than 67 per cent from Septem­ber 2014, when the re­ceipt was at its peak, to July 2015, with dire con­se­quences to the Fed­er­a­tion. This con­tin­ued de­cline in oil price led to in­suf­fi­cient cash avail­able to meet the monthly JV Cash Calls obli­ga­tions of about $615.8m as ap­pro­pri­ated by the Na­tional Assem­bly.

To mit­i­gate this ef­fect, the NNPC was com­pelled to sweep all the ex­port re­ceipts to JV Cash Call fund­ing, im­ply­ing a zero re­mit­tance to Fed­er­a­tion Ac­count since the month of April,” the re­port says.

It ex­plained that the sub­se­quent months of April, May, June, July, and Au­gust had zero dol­lar trans­ferred to the Fed­er­a­tion Ac­count as all earn­ings from ex­port crude oil were di­verted to off­set the monthly Joint Ven­ture (JV) Cash Calls obli­ga­tions of about $615.8 mil­lion as ap­pro­pri­ated by the Na­tional Assem­bly, im­ply­ing a zero re­mit­tance to the Fed­er­a­tion Ac­count since the month of April 2015.

The pub­li­ca­tion pro­vides an over­view of NNPC’s oper­a­tions across the oil and gas value-chain (up­stream, midstream and down­stream), as well as NNPC’s agency func­tion on be­half of Gov­ern­ment of the Fed­er­a­tion from the pe­riod Jan­uary to Au­gust 2015.

Specif­i­cally, the re­port pro­vides de­tailed and un­prece­dented sta­tis­ti­cal in­sight into cru­cial as­pects of the Cor­po­ra­tion’s ac­tiv­i­ties, rang­ing from Na­tional Crude Oil & Nat­u­ral Gas Pro­duc­tion; Lift­ing and Uti­liza­tion; Re­finer­ies Plants Oper­a­tions; and Petroleum Prod­uct Sup­ply & Dis­tri­bu­tion to the NNPC bud­get per­for­mance re­port and fed­er­a­tion crude oil & gas rev­enue.

The re­ceipts wit­nessed a sharp de­cline of more than 67 per cent from Septem­ber 2014, when the re­ceipt was at its peak, to July 2015, with dire con­se­quences to the


Ibe Kachikwu

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