NNPC pays $607m, N723bn to FG in 8 months
…No dollar payments made to Fed Account in 5 Months
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