NNPC withheld $16.8bn NLNG dividend due FG in 16 years
The Nigerian National Petroleum Corporation (NNPC) failed to remit a total of $16.8billion it earned as dividend for its 49 percent stake in the Nigeria Liquefied Natural Gas Limited (NLNG) to the Federation Accounts in sixteen years, says the Nigerian Extractive Industries Transparency Initiative, (NEITI) in its 2015 audit report released on Friday.
In 2015, NLNG paid $1.07 billion as dividend, interest and loan repayment to NNPC, broken down as follows: $1.04 billion as dividends, $3.1 million as interests, and $29.1 million as loan repayment. This brings to a total of $16.8 billion NLNG’s payments to NNPC for the period 2000 to 2015. The payments are for the loan grant to NLNG and for the 49% stake that the government holds in the company.
“While NNPC has always confirmed receipt of the payments, it has never shown evidence of remittance to either the Federal Government or to the Federation Account,” NEITI says in a statement.
NNPC maintains that it has authorization from the presidency to hold the dividends in trust and utilises it as directed by the government but it has never rendered accounts for these monies to the Nigerian people.
“NEITI recommends that NNPC should provide documentary evidence of the authorisation to hold the money in trust and to give account of the expenditure from and the status of the $16.8 billion collected in 16 years,” said NEITI.
This continues a pattern of non-remittance despite several invitations by the national assembly for heads of the NNPC to explain reasons for non-remittance. Last year, NEITI said that between 2000 and 2014, the NNPC had received as $15.8billion as dividend but there was no evidence that it remitted same to the Federation Account.
“Beyond providing a snapshot of what transpired in 2015, this report reveals money to be recovered, leakages to be blocked, and urgent reforms to be undertaken,” said Waziri Adio, the Executive Secretary of NEITI, at the release of the report. “The most critical take-away is the need to expedite, expand and sustain reforms in this still critical sector of national life.”
NLNG dividends and loan repayments are major source of revenue loss to the federation and the NNPC, as custodian of the country’s shares in the NLNG, received her share of the dividends but often does not explain why they are not remitted to the Federation Account.
However, this practice is strange among other national oil companies. Statoil, 67% owned by Norway, is the largest operator on the Norwegian continental shelf, with 60% of the total production and operates oil and gas fields in Australia, Algeria, Angola, Azerbaijan, Brazil, Canada, China, Libya, Nigeria, Russia, United States, and Venezuela.
Yet revenues from these activities are managed in an oil fund which is invested to benefit current and future generations. Statoil presents an audited account to shareholders and in its 2016 financial statement, Øystein Løseth, chairman of the board said “The board of directors have during the year worked closely with the administration to review and confirm Statoil’s sharpened strategy.”
Maikanti Baru, NNPC GMD in October last year, said he was not required to confer with his board in contract approvals or running the NNPC.
Saudi Arabia’s Aramco, Russia’s Rosneft, the China National Petroleum Corporation, the Kuwait Petroleum Corporation and even the Abu Dhabi National Oil Company (ADNOC) do not have a system where the proceeds of a country’s investments are held by the national oil company in trust for the country without proper accounting.
This situation feeds the perception that the NNPC is opaque and corrupt and analysts say that is why it has become a willing tool in the hands of any government in power to finance elections and run an elaborate patronage system.
“Since the arrival of this administration, there has been an improvement in transparency through publishing monthly operational and financial report of the corporation,” said Buhari while inaugurating three boards under the corporation in November 2016.
But this sounds hollow considering the fact the monthly reports, released three months after the fact “do not capture the essential information to know the true state of the company, they are just unaudited figures, without any independent assessment, how can they be reliable?” said a former NNPC general manager.
Two years after Buhari was sworn as President, the NNPC has still not produced an audited account. The 2017 Resource Governance Index, compiled by the Natural Resource Governance Institute (NRGI), found that value is lost particularly in licensing and in NNPC’s sales of government oil, as well as when revenues from oil and gas are shared and saved.
Sarah Muyonga, Nigeria country manager for Natural Resources Governance Institute said that NNPC has made some new disclosures under the Buhari administration, but the details and revenue implications of many of its high-value transactions remain secret.
Muyonga further said that the Nigerian government does not regularly publicly disclose government officials’ financial interests in the extractive sector or the identities of beneficial owners of extractive companies. This enables widespread corruption, with which Nigerians are all too familiar.
NEITI also said that Nigeria’s oil and gas revenues plunged from $54.5 billion in 2014 to $24.8 billion in 2015, while the country’s oil production fell from 798 million barrels in 2014 to 776 million barrels in 2015.
ISAAC ANYAOGU