Posted by News Express | 18 July 2016 | 2,858 times
The Federal Government has lost over $518 million to oil swap and Offshore Processing Agreements (OPA) in 2013 due to inefficiencies by the Nigerian National Petroleum Corporation (NNPC) and its subsidiaries.
Disclosing this to the Economic Confidential magazine, the Executive Secretary of the Nigeria Extractive Industries Transparency Initiative (NEITI), Mr. Waziri Adio, said the Federal Government lost $211.88 million to crude for product swap, and $306.16 million to OPA, totaling $518 million.
Adio, who spoke on the backdrop of the just-released 2013 Oil and Gas Industry Audit report, noted that NNPC and its subsidiaries also withheld some of the monies that are due to government.
“For instance, they withheld $3.8 billion and N358 billion. Now, let us break it down this way: If you remember, NNPC divested some of its interests in Shell Joint Venture, about eight Oil Mining Leases (OMLs), to Nigeria Petroleum Development Company (NPDC); $1.29 billion from NLNG; N354 billion from unpaid domestic crude debt; N3.98 billion from subsidy over-recovery in 2012 and N2.17 billion from cash-call refunds,” he said.
Furthermore, he said the report discovered $4.7 billion from theft and vandalism in three JVs—Shell, Agip and Chevron; and N20 billion from not observing 90-day credit time value of money at 12 per cent. The issues captured, according to him, still need further elaboration.
“Now NNPC divested 55 per cent in eight assets (OMLs) in Shell JV: OMLs 4, 26, 30, 34, 38, 40, 41, and 42. They were valued by DPR at $1.8 billion, but according to Price Waterhouse Coopers (PWC), they should have been valued at $3.4 billion, given that Shell got $2.72 billion for its 45 per cent interest in those same assets.
This then means that Shell’s 45 per cent valued at 47 per cent higher than Federation’s 55 per cent.
Let us look at it another way. Given the disparity between $3.4 billion and $1.8 billion, assets valued at 47 per cent loss or discount.
But even with discount or loss, NPDC paid only $100 million, leaving an outstanding of $1.7 billion. This means that NPDC paid only 5.6 per cent of the discounted value of $1.8 billion, and 3 per cent of actual value of $3.4 billion and yet enjoyed all the benefits, as oil from those assets lifted on behalf of NPDC and not the Federation,” he said.
Speaking on the four assets under the Nigeria Agip Oil Company (NAOC) JV similarly divested. OMLs: 60, 61, 62, and 63, Adio noted that no valuation was done on those 4 OMLs; neither consideration paid, and yet oil was lifted on behalf of NPDC, not the Federation.
He said despite the fact that 12 OMLs in the Shell and Agip JVs divested to NPDC, and not fully paid for or not paid for at all, NAPIMS paid cash-calls on some of these OMLs, namely, $536 million paid as cash call on the four OMLs from Agip JV, $389 million refunded to NAPIMS, but refund not remitted to Federation, apart from an outstanding of $147.8 million not paid at all.
“There are also cash-calls paid on some of the divested OMLs from the Shell JV, which include $35.12 million refunded to NAPIMS, but refund not remitted to Federation. Records from NAPIMS showed request for refund of $414,000 and N249, 272, 000 on OML 25 apart from request for refund of $2.17 billion on OML 42. You can’t imagine that these requested refunds were not made as at close of audits,” he said. (Daily Sun)
No comments yet. Be the first to post comment.