Senate on Wednesday set up an ad hoc Committee to scrutinise a Nigeria Extractive Industry Transparency Initiative (NEITI) report.
This is following allegation that a total of over $5.9 billion was not remitted to government treasury in 2013 by the Nigeria National Petroleum Corporation (NNPC).
Members of the ad hoc Committee chaired by Senator Barau Jibril, Senator Tayo Alasoadura, Senator John Enoh, Senator Kabiru Marafa, Senator Adeola Olamilekan, Senator Chukwuka Utazi, Senator Bukar Mustapha.
The Executive Secretary of NEITI, Mr. Waziri Adio had said while briefing Senate that his agency made the information to the public in order to reforms in the oil sector.
He said, “We publish audit report every year because we have a mandate to promote accountability and transparency in the management of resources from oil, gas and mining.
“I have 10 major points from oil and gas audit and a few on the solid minerals sector. In 2013 the country produced 800.3 million barrels.
“Out of that, the country made 58.07 billion dollar and that represents an 8 percent reduction on the 62.9 billion dollars that the country made in 2012.
“The second issue is that there are some monies that were withheld, lost or underpaid for different reasons.
“These monies are in three tranches. The first is in the category of the unremitted, and the unremitted amounted to 3.8 bn dollars and 358 million naira”, he stated.
According to him, “The second category is the category of losses, because of some inefficient practices and theft among other things, the country lost 5.9 bn dollars and 20 bn naira due to the fact that NNPC did not obey the
“Under the category of the under-accessed the country lost 599.8 million dollars when we look at the unremitted, 1.7bn dollars is still being owed the federation for OMLS.
“Also, N1.29 billion dollars from the NLNG dividends and 351 billion naira from unpaid domestic crude debt N2.17 billion from cash calls refunds”.
He told the Senate that all the funds were expected to be lodged in federation account, but were yet to be lodged at press time.
“Those are the monies we have established that should have been paid to the federation and were not paid.
“The second category of losses by NNPC and its subsidiaries: Out of the 5.9 billion dollars that we lost 4.7 billion was lost to theft and vandalism.
“20 billion naira was lost because the NNPC did not observe the 90 days credit grace.
“And when you look at the time value of money, if you calculate at 12 percent interest the country lost 20 billion naira.
“Some of the issues in the report: The first is about the assets divested by NNPC to NPDC.
“NNPC between 2010 and 2011 divested eight assets that belong to the federation to its upstream subsidiary NPDC.
“So, NNPC divested 55 percent of the shares being held on behalf of the federation to the NPDC.
“These eight OMLS are valued at 1.8 billion dollars by DPR.
“NPDC paid only 100 million out of the 1.8 billion dollars meaning there is an outstanding of 1.7 billion dollars and even that 100 million was paid two years after”.
He disclosed that “what this means is that NNPC lifted oil on behalf of NPDC not on behalf the federation despite the fact that NPDC has not fully paid for those assets”.
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