NNPC, Oil firms owe Nigeria N9.4 trn from 2021 ops

  • NNPC leads N6.6 trn secret debts;
  • Withheld N2.33 trn from the federation account;
  • Staked Nigeria’s crude oil for N11.5 trn loans

Sopuruchi Onwuka

Some 47 oil companies operating in Nigeria’s upstream petroleum industry and the Nigerian National Petroleum Company (NNPC) Limited joint owe the federation staggering $9.85 billion or about N9.5 trillion in unpaid financial obligations to the Federal Inland Revenue Service (FIRS) and the Nigerian Upstream Petroleum Regulatory Commission (NUPRC).

The Oracle Today explains that whereas the FIRS is the nation’s overall tax man in the petroleum industry, the NUPRC is the lease administrator and technical regulator of the industry. Both agencies collect different revenues from the industry on behalf of the federal government.

In its audit report on the operations of the petroleum industry in 2021, the Nigerian extractive Industry Transparency Initiative (NEITI) declared that the national oil company owed $6.923 billion or N6.6 trillion of the secret debts. The rest of $1.342 billion or N1.3 trillion is owed by private commercial players in the industry.

In providing the highlights of the 166 page report which was unveiled on Monday, the Executive and the Chief Executive Officer of NEITI, Dr Orji Ogbonnaya Orji, stated that the leakages were determined and confirmed in a meticulous audit process in which all the indicted companies also endorsed.

The report which exposed deep decay and shady deals in the petroleum industry also showed how the NNPC Limited breached approval processes in making unauthorised withdrawal from the nation’s oil revenue channels ahead of declaring proceeds to the federation.

According to the report, the NNPC Limited withheld some significant N2.33 trillion from the federation account in the year under review. And NEITI stated that the unauthorised deductions are in flagrant disregard to the provisions of the law which, according to the agency, requires all revenues to be remitted to the government ahead and all withdrawals appropriated and captured in the budget.

Some of the deductions made by the national oil company without appropriate approval and ahead of mandatory remittance to the federation account include $1.94 billion or some N1.843 trillion if calculated at today’s exchange rate. NEITI stated that the amount was not due for payment as at December 2021.

There is also $871.15 million or N83 billion recorded as outstanding liability as at December 2021; $3.15 billion or N2.993 trillion recoded as fuel subsidy deduction for the year; N6.2 billion deducted as crude and product losses; N22.05 billion deducted for pipeline repairs and maintenance in the year; and N6.15 billion deducted for strategic stock holding.

In some rancid deals uncovered in the report, the NNPC Limited also staked the nation’s crude oil in barter for transactions that totalled $12.105 billion or whopping N11.5 trillion and another N118.713 million in four separate deals.

The national oil company, according to the NEITI report, executed crude swap deals worth $7.108 or N6.753 trillion under its direct supply and direct purchase (DSDP) arrangement with oil traders and refiners.

There are also other pledges of the nation’s crude in a subsidy refinancing deal named Project Eagle with a total transaction value of $1.5 billion currently in the range of N1.425 trillion; NLNG project financing totalling $2.469 billion or N2.346 trillion; and Project Bison in which the NNPC hid its $1.036 billion or N984.2 billion equity stake in Dangote Refinery.

The Oracle Today reports that the revelation of the financial leakages comes at a time the new administration of President Bola Tinubu is scrambling for resources to activate its economic revamp programmes after inheriting hollowed revenue channels that have been compressed by huge loans amassed by the erstwhile administration of former President Muhammadu Buhari.

The current group boss of the NNPC Limited, Mallam Mele Kyari, is popular with pledging the country’s crude oil for loans that are pinned on upstream petroleum industry projects that have failed to yield dividends for the country.

The Oracle Today has in this report valuated the dollar denominated debts against the prevailing exchange rate of N950 per dollar in order to capture their current value.

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