Nigeria to probe state oil firm over gas revenues

Nigeria’s senate voted on Tuesday to investigate the alleged withdrawal of $1.05bn by the Nigerian National Petroleum Corporation (NNPC) from Nigeria LNG (NLNG), a venture owned by the state oil firm and foreign energy companies.

Nigeria’s Premium Times newspaper reported on Monday that the NNPC had used the portion of NLNG earnings that should have been passed to local and federal state authorities to fund the state oil firm’s fuel purchases and subsidies during a shortage in late 2017 and early 2018.

NLNG, which produces liquefied natural gas (LNG) for export, is owned by the NNPC and foreign energy firms Royal Dutch Shell, Total and ENI.

A Shell spokesperson declined to comment. Officials from the NNPC, NLNG, ENI and Total were not immediately available to comment.

The probe could undermine plans by the partners in NLNG to decide by the end of 2018 on an expansion. New LNG production facilities are expected to benefit from a tightening global market. The Premium Times report said the NNPC was not authorised to withdraw the $1.05bn from NLNG.

The money was meant to be shared between federal, state and local governments.

The senate voted to investigate the allegations, saying the money was not allocated to the NNPC in the 2018 budget and so any spending by the state company of the cash was unauthorised. Senator Bassey Akpan, who brought the motion to investigate the matter, said he was “bringing the attention of the senate to various e-mails and complaints from the general public on the unauthorised withdrawal of $1.05bn by the NNPC from the NLNG account”.

The fuel shortage in 2017 and early 2018 saw the NNPC spend at least $5.8bn on fuel imports.

NLNG operates six LNG processing units on Bonny Island. They produced 20-million tons of LNG in 2017. NLNG’s partners have promised a final investment decision on a seventh train by the end of 2018, which could now be in doubt.