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Monday, December 16, 2013
According to reports out of Nigeria the country’s state-run oil firm NNPC, is missing about $50 billion in oil revenues. The Central Bank of Nigeria (CBN) claims that NNPC has failed to account for nearly $50 billion of crude sales over the 18-month period between January 2012 and July 2013. These funds, under Nigerian law, should have been remitted to the government.
NNPC has rejected these allegations saying in a statement it denied withholding payments and said the CBN’s information was “misleading” and “capable of creating public disaffection.” The statement continued, “The allegation is born out of misunderstanding of the workings of the oil and gas industry and the modality for remitting crude oil sales revenue into the federation account.”
The state-run firm’s managing director Andrew Yakubu recently told reporters in Abuja that the processes of remittances into government coffers was not hidden and that NNPC was “taken aback by the comment of the CBN governor” because most of the operations were multi-agencies transactions. He said that all agencies involved meet regularly, reconciling and lifting numbers that are agreed to jointly and approved before the lifting of crude oil.
“Operations at the terminals that have to do with loading are also done by all the agencies particularly and are championed and driven by all the regulatory agencies who are the arbiters of numbers.” Yakubu said these agencies oversee all operations and NNPC is not the only player in the entire oil and gas value chain. He went on to say that the financial inner workings of the oil industry dictates that the CBN, NNPC, Federal Inland Revenue Service (FIRS), and the Department of Petroleum Resources (DPR) meet regularly to reconcile liftings, sales and remittances of proceeds, and that the data presented are jointly reconciled by CBN, NNPC, FIRS, and DPR.
The 24% of total crude oil earnings the CBN acknowledges receiving represents the full amount due from the NNPC’s share of sales, the statement from NNPC said. The remainder could be accounted for in field development costs as well as from the receipts collected by other government agencies.
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