25.2 C
Friday, March 24, 2023

NEITI makes clarifications on non-remittance of crude oil proceeds, NLNG dividends

The Nigeria Extractives Industries Transparency Initiative (NEITI) has said that there are misrepresentations and inaccuracies in some sections of the media arising from publications based on its recent presentation at a public hearing organised by the House of Representatives.

Executive Secretary of NEITI, Waziri Adio

The House of Representatives Ad Hoc Committee had invited NEITI to its public hearing held on the Thursday, June 8, 2017 on alleged $17 billion undeclared crude oil and liquefied natural gas exports to global destinations.

But NEITI said in a statement on Wednesday, June 14, 2017 that it was misquoted or misrepresented by certain publications on the facts it presented to the Committee on the revenue losses to the federation due to crude oil theft and unremitted funds to the federation.

The transparency and accountability organisation therefore, for record purposes, restated what it calls the facts as was presented to the Committee by its Executive Secretary, Mr. Waziri Adio.

At the hearing, Mr. Adio identified the major sources of revenue losses to the federation to include:

  1. Unremitted NLNG dividends and loan repayments. On this issue, NEITI stated that “The NNPC, as custodian of Nigeria’s shares in the NLNG, received Nigeria’s share of NLNG dividends paid to the corporation for 15 years amounting to $15.8 billion between years 2000 and 2014. However, NEITI reports disclosed that NNPC failed to remit the proceeds to either the Federation Account or the federal government”. From the presentation, NLNG paid the dividends to NNPC but NEITI has no evidence that NNPC remitted the funds to the Federation Account. It is therefore incorrect to report, as some publications did, that NLNG owes the federation.
  2. Crude oil theft. NEITI told the Committee that the total revenue losses to the federation as a result of crude oil theft, deferred production and sabotage between 2011 and 2014 stood at $15.9 billion. The breakdown of the figures is shown below:

Summary of federation volume and value of export crude oil losses from 2011-2014

                      2011 38.6 4.4
                      2012 23.8 2.7
                      2013 37.7 4.7
                      2014 40.2 4.1
                     TOTAL 140.3 15.9


  1. Federation Assets held by the Nigeria Petroleum Development Company (NPDC): The NEITI Audit reports showed that NPDC failed to remit the sum of $5.5 billion and N72.4 billion comprising of outstanding payments for the OMLs divested to it, cash calls paid by NNPC to the NPDC for already divested assets and legacy liabilities.
  2. Oil SWAP and Off-shore Processing Agreements: Based on its reports findings, NEITI told the Committee that the Off-shore Processing Agreements (OPAs) and the oil swaps resulted in the loss of product value equivalent to $518 million in 2013 and $198.7 million in 2014.
  3. Expired MoUs. NEITI identified the existence of expired MoUs as another source of revenue loss to the federation. In its presentation to the Committee, NEITI pointed out that the expired agreements have led to under-assessment of government’s share of oil revenue. As a result, the revenue loss to the federation stood at $599 million in year 2013 alone.

The statement, endorsed by Dr. Orji Ogbonnaya Orji, Director, Communications, reads: “In view of the foregoing, NEITI wishes to reiterate that there is a difference between revenues already earned but not remitted to the Federation Account and value of losses in revenues that the country would have earned if crude oil theft, pipeline vandalism, deferred production and sabotage were checked. Therefore merging the value of losses due to crude oil theft with that of unremitted funds as was presented in some sections of the media was wrong and misleading. Equally so is reporting that NLNG owes the federation or that money not accounted for was stolen.

“While appreciating the contributions of the media and its support to the NEITI process, we plead for deeper engagement with NEITI to seek clarifications where necessary to get the facts and the numbers right.”

Latest news

- Advertisement -
- Advertisement -

You might also likeRELATED
Recommended to you

%d bloggers like this: