The Nigerian Extractive Industries Transparency Initiative (NEITI) has distanced itself from recent media reports that it uncovered $22.8 billion unremitted oil revenue by the Nigerian National Petroleum Corporation (NNPC).

NEITI’s Director of Communication, Dr. Orji Ogbonnaya Orji, said in a statement issued in Abuja, the Nigerian capital: “What NEITI presented and explained at the public hearing was that the Federal Government, through the NNPC entered into alternative funding/financing arrangements with its JV partners in the form of third party financing from external financial markets, i.e. banks, and Modified Carry Arrangements (MCA) which are loans from existing JV partners, IOCs.

“NNPC’s share in the third party financing is paid to CBN/NNPC crude oil and gas Dollar revenue account and subsequently swept to the federation accounts while under the MCA an escrow account is opened at the lenders’ bank into which buyers pay proceeds from the crude oil and gas sales.

“NEITI observed that these transactions which sum up to $22.8 billion are off balance sheet items, not disclosed in NNPC’s audited financial statements. The implication is that there may be significant contingent liabilities to the federation that is not being disclosed.

“We need to state further that it does not mean that NEITI has discovered some funds hidden somewhere or monies that were unaccounted for by the NNPC. That was why NEITI recommended that all alternative funding arrangements should be disclosed in the audited financial statements of NNPC for clarity and openness in line with the EITI principles.”

Orji also described as misleading, media reports from the presentation quoting NEITI as saying that Nigeria loses $8 billion annually through crude oil swap.

He said: “The media reports from that presentation attributed to NEITI that the nation losses $8 billion annually through crude oil swap. This is not only wrong but misleading. What NEITI presented and explained at that hearing was that there is no cost efficiency in the transactions with the offshore processing organisations.”

The NEITI Director of Communication expressed the agency’s concern that the contents of its presentation to the legislative committee “have been largely misconceived, misinterpreted and misrepresented by some sections of the media.”

While thanking the media for their continued support for NEITI, Orji said: “As an Agency with principles, methods, procedures and mandate firmly rooted in transparency, accountability and integrity, we are constrained to make some clarifications on key issues that were certainly not correctly reported by the media following that presentation.

“These clarifications have become necessary in the overriding public interest, NEITI stakeholders, our international partners and the global Extractive Industries Transparency Initiative.”

Orji drew attention to the fact that “NEITI’s presentation to the Committee was based on the findings and recommendations of its 2009 - 2011 independent Oil and Gas Industry Audit Report, is in the public domain and on the NEITI website.”

He added: “All relevant government agencies, relevant committees of the National Assembly, companies, the media and civil society have copies of the Report which was also made public since last year.”

A source at NEITI gave an idea of why the agency is worried about the media misrepresentation, saying that that apart from giving the wrong impression about the agency, “a major contributing factor to the current fuel scarcity experienced in Nigeria is that these sensational and misleading headlines make accessing international finance to fund petroleum product delivery into Nigeria very difficult, due to compliance issues raised by such misleading headlines.”

•Photo shows NEITI Executive Secretary, Mrs. Zainab S. Ahmed.

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