Feb. 26, 2014
(THEWILL) â The Nigeria Extractive Industries Transparency Initiative (NEITI) Wednesday alleged that Nigeria National Petroleum Corpooration (NNPC) did not disclose about $22.8 billion dollars in its audited financial statement.
Executive Secretary of NEITI, Mrs. Zainab Ahmed, disclosed this at the ongoing House of Representatives investigation into allegations of connivance of NNPC with Swiss oil dealers to rob the country of billions of dollars.
She said the local refineries were unable to utilise 445,000 barrels of crude per day, explaining that this forces NNPC to engage in alternative transactions by importing.
According to her, the alternative transactions amounted to $22.8 billion that was not disclosed in the corporationâs audited financial statements.
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âNEITI observed that these transactions which sum up to $22.8 billion are off balance sheet items (not disclosed in NNPCâs audited financial statements). The implication is that there may be significant contingent liabilities to the Federation that is not being disclosed,â she disclosed.
She suggested that the countryâs refineries should instead be privatised, saying the refineries are operating far below their name plate capacities.
Ahmed noted that the 445,000 barrels per day allocation to the refineries should be reviewed to their actual refining capacity, explaining that âAs the refineries got older, their performance deteriorated due to the poor maintenance culture in place.â
She said because of the inability of the NNPC to utilise its domestic crude allocations, it usually exported it. According to her, NNPC had agreements with Societe Ivoirenne De Raffinage ( SIR) and Nigermed for processing some quantities of the crude oil offshore adding that there was no cost efficiency in the transactions with the offshore processing Organisations of SIR and Nigermed.
Also testifying before the committee, the Managing Director of PPMC, Haruna Momoh, in his presentation also corroborated NEITI that the 445,000 barrels of crude oil that are allocated to it on a daily basis are not fully utilised by the local refineries.
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He explained that the NNPC had to enter into agreements to satisfy domestic demands for refined products. â(The) epileptic nature of the countryâs refineries (is) due to the following: frequent pipeline vandalism, which disrupts the supply of crude oil to the refineries and evacuation of finished products. There is also the problem of security challenges (in the country).
âThe 445,000 barrels allocated to PPMC per day is not fully utilised by the local refineries. NNPC had to enter into agreements to exchange the unutilised crude oil volumes for refined products to satisfy domestic consumption through offshore processing agreement (OPA)and SWAP arrangements,â Momoh added.
Momoh said NNPC imported petroleum products on the basis of open account through tender process from reliable oil trading companies prior to the introduction of OPA and SWAP.
He explained the genesis of fuel scarcity, especially in 2009/2010 with the attendant negative consequences to the economy.
âPPMC started witnessing default from oil traders during the open account, especially around winter months when Nigerian specs of gasoline is expensive and high freight cost. The open account also exposed PPMC to certain vulnerable market conditions, where suppliers request PPMC the payment of premium as high as $116 per metric ton for two ports discharge and $122 per metric ton for Calabar deliveries,â he said,
According to him, following the OPA entered into with Messrs S.I.R. on September 1, 2010, PPMC allocates 60,000 barrels of crude oil per day to S.I.R. for processing at their refinery located in Ivory Coast.
âNNPC delivers two crude oil cargoes per month, representing 60,000 barrels per day in cargo size of approximately 950,000 barrels each to S.I.R. The crude oil is refined at a processing fee of $2.20 per barrel, and S.I.R. delivers the refined products (PMS and DPK) to PPMC in cargo sizes of 27,000 metric tons and 38,000 metric tons,â he added.
SAINT MUGAGA, ABUJA.
– See more at: http://thewillnigeria.com/news/neiti-alleges-undisclosed-22-8b-in-nnpcs-audited-account/#sthash.XmgLCG8T.pciITLqo.dpuf
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The day reckoning will come and all that are involved in this monumental fraud will give account. If GEJ likes let him suspend DG of NEITI too.
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NNPC Gets Presidential Nod on $1.5 billion Loan
09 Jan 2013
Font Size: a / A
President Goodluck Jonathan
â¢Finance minister denies blocking payments to oil marketers
Chika Amanze-Nwachuku in Lagos and Chineme Okafor in Abuja with agency report
President Goodluck Jonathan has given his consent to the Nigerian National Petroleum Corporation (NNPC) to secure a $1.5 billion syndicated loan from Nigerian and international lenders led by Standard Chartered Bank Plc, to enable it to settle its huge indebtedness to foreign oil traders, THISDAY has learnt.
In a related development, the Federal Ministry of Finance yesterday confirmed that it had on December 31, 2012 released the N161.6 billion approved by the National Assembly as supplementary budget for subsidy payments.
The state oil company reportedly owes major commodity trading houses, including Glencore and Mercuria, about $3.5 billion in unpaid fuel supply bills.
Highly placed NNPC sources confirmed the corporation had secured the presidentâs approval to secure the loan, but explained that the syndicated facility was yet to be obtained, contrary to Reuters report on Monday that the corporation had already secured the loan.
THISDAY however gathered that discussions between NNPCâs top management and the banks involved in the deal are at advanced stages and that the deal would be âsealed in no distant timeâ.General Manager, Government Relations at NNPC, Ms. Tumini Green, also confirmed in a telephone conversation with THISDAY that the loan had not been secured, but that discussions to that effect had reached advanced stages.
Green, who doubles as the spokesperson for NNPC, however, declined to comment on the presidential approval, adding that the corporationâs decision to seek for the syndicate loan was to enable it to offset its debts.
She said: âThe loan has not been obtained yet. It is still being worked out. This is a purely business transaction and is done in good faith. If you owe somebody, you have to look for how to pay. So we are looking for money to pay our debts.â
Green said the loan deal was a crucial measure to help the corporation stay in business, insisting that by taking that step, NNPC had not contravened any aspect of the law establishing it as a state-run oil company.She argued: âIf you are in business and owe somebody, you will be compelled to seek legitimate means of paying off your debts. That is exactly what we are doing and it is within the law. We are allowed to do our job as expected and there is no bad intention in that.â
Reacting to reports that the National Assembly may kick against the loan, especially in view of its recent approval of the supplementary budget last month to offset outstanding subsidy bills in 2012, Green queried: âWhy would anybody not want us to pay off our debts, especially when it is done legitimately? I donât think it is right.â
She, however, pointed out that the NNPC was yet to get any reaction from the National Assembly on the issue.
Greenâs statement, nonetheless, coincided with yesterdayâs reaction of the Senate, which expressed ignorance of the $1.5 billion loan being secured by NNPC.To support its decision to borrow, NNPC said the law establishing the corporation authorises it to borrow in the exercise of its functions.
Sections 6 (1)(c) and 8 (1)(2) of the NNPC Act states: âThe corporation, in fulfillment of its duties can enter into contracts or partnerships with any company, firm or person, which in the opinion of the corporation will facilitate the discharge of the said duties under this Act.
âSubject to the other provisions of this section, the corporation may from time to time borrow by overdraft or otherwise howsoever such sums as it may require in the exercise of its functions under this Act and the corporation shall not, without the approval of the National Council of Ministers, borrow any sum of money whereby the amount in aggregate outstanding on any loan or loans at any time exceeds such amount as is for the time being specified by the National Council of Ministers.â
The petroleum ministry had in a report last year disclosed that NNPC was indebted to major commodity traders, including Glencore and Mercuria, to the tune of $3.5 billion in unpaid fuel supply bills.
A Reuters report yesterday, which cited a report last year commissioned by the ministry, stated that a list of creditors published in an oil report earlier this year, showed there were 35 firms still owed for fuel.
The list showed that Glencore was owed $138 million, Vitol was owed $198 million and Trafigura was owed $53 million.
The debts for some individual trading companies are widely thought to be much higher due to exposure via subsidiaries and partner firms.For example, Bermuda corporate registration documents showed that Calson, owed $115.11 million by NNPC, was using Vitol’s Geneva address.
Similarly, Napoil, owed $75.6 million, is a partner of Trafigura, its website showed.
The inability of the Federal Government to pay the corporation over $8.1 billion in outstanding subsidy claims is said to be straining its ability to import petrol and has strained its finances after private companies stopped importing early last year.But giving an update on the subsidy payments, the Coordinating Minister for the Economy and Minister of Finance, Dr. Ngozi Okonjo-Iweala, said yesterday that the finance ministry had as at December 31, 2012 released the N161.6 billion approved by the National Assembly as supplementary budget for subsidy payments.
Okonjo-Iweala, in a statement by her media aide, Mr. Paul Nwabuikwu, refuted media reports (not THISDAY), which alleged that the ministry was blocking verified payments to marketers.
According to the statement, the finance ministry made the N161.6 billion supplementary budget for subsidy payments, which had been approved by the National Assembly, available to the Central Bank of Nigeria (CBN) since December 31, 2012.
The statement read: âThe payments are presently going through the CBNâs processes which include the conversion of the dollar equivalent from the Excess Crude Account (ECA) and will be concluded soon.âThe release also noted that payments totalling N94 billion had been verified for 23 marketers who would be paid in the next few days.
âWe are committed to paying all companies who deserve to get subsidy payments just as we will not pay undeserving firms. That is the mandate we have from the president,â the minister said.Meanwhile, the Chairman, Senate Committee on Petroleum Downstream, Senator Magnus Abe, yesterday said that the legislature was unaware of the $1.5 billion loan that NNPC is in the process of securing to finance fuel imports.
He said in a statement in Abuja that NNPC had not informed the Senate about the transaction.âAs at yesterday afternoon, there was no record of the loan deal before us. We are still trying to confirm the loan from NNPC.
âThe committee read about the loan deal in the newspapers like other Nigerians and we have had concerned Nigerians calling to ask whether the National Assembly approved the loan,â he added.The senator explained that while the lawmakers were also worried about the development, there was no record of such a deal before the committee that has oversight over the corporation.
Also responding to THISDAY enquiries on the deal, Chairman, Senate Committee on Media and Public Affairs, Senator Enyinnaya Abaribe, corroborated Abeâs submission that the Senate did not approve the loan deal.
He said: âUnder the law, no government agency can borrow without the approval of the National Assembly.
âWe have to know if that was done first, but then the question to ask under the circumstances is: What happened to the N161 billion supplementary appropriation that was approved by the National Assembly to take care of the shortfall in the fuel subsidy budget, particularly to ensure steady supply of petroleum products during the yuletide?âThe loan, brokered by Standard Chartered Bank Plc, will be repaid over five-and-a-half years, while the NNPC has put up 15,000 barrels per day of its oil production as collateral.
-
Nigeria Missing Money
Every leader sitting on Nigeria money with his or her evil power is sitting on a time bomb;
Oh God! Arrest them, expose them, disgrace them and prosecute them in Jesus name. Amen.
The day reckoning will come and all that are involved in this monumental fraud will give account. If GEJ likes let him suspend DG of NEITI too.
NNPC Gets Presidential Nod on $1.5 billion Loan
09 Jan 2013
Font Size: a / A
President Goodluck Jonathan
â¢Finance minister denies blocking payments to oil marketers
Chika Amanze-Nwachuku in Lagos and Chineme Okafor in Abuja with agency report
President Goodluck Jonathan has given his consent to the Nigerian National Petroleum Corporation (NNPC) to secure a $1.5 billion syndicated loan from Nigerian and international lenders led by Standard Chartered Bank Plc, to enable it to settle its huge indebtedness to foreign oil traders, THISDAY has learnt.
In a related development, the Federal Ministry of Finance yesterday confirmed that it had on December 31, 2012 released the N161.6 billion approved by the National Assembly as supplementary budget for subsidy payments.
The state oil company reportedly owes major commodity trading houses, including Glencore and Mercuria, about $3.5 billion in unpaid fuel supply bills.
Highly placed NNPC sources confirmed the corporation had secured the presidentâs approval to secure the loan, but explained that the syndicated facility was yet to be obtained, contrary to Reuters report on Monday that the corporation had already secured the loan.
THISDAY however gathered that discussions between NNPCâs top management and the banks involved in the deal are at advanced stages and that the deal would be âsealed in no distant timeâ.
General Manager, Government Relations at NNPC, Ms. Tumini Green, also confirmed in a telephone conversation with THISDAY that the loan had not been secured, but that discussions to that effect had reached advanced stages.
Green, who doubles as the spokesperson for NNPC, however, declined to comment on the presidential approval, adding that the corporationâs decision to seek for the syndicate loan was to enable it to offset its debts.
She said: âThe loan has not been obtained yet. It is still being worked out. This is a purely business transaction and is done in good faith. If you owe somebody, you have to look for how to pay. So we are looking for money to pay our debts.â
Green said the loan deal was a crucial measure to help the corporation stay in business, insisting that by taking that step, NNPC had not contravened any aspect of the law establishing it as a state-run oil company.
She argued: âIf you are in business and owe somebody, you will be compelled to seek legitimate means of paying off your debts. That is exactly what we are doing and it is within the law. We are allowed to do our job as expected and there is no bad intention in that.â
Reacting to reports that the National Assembly may kick against the loan, especially in view of its recent approval of the supplementary budget last month to offset outstanding subsidy bills in 2012, Green queried: âWhy would anybody not want us to pay off our debts, especially when it is done legitimately? I donât think it is right.â
She, however, pointed out that the NNPC was yet to get any reaction from the National Assembly on the issue.
Greenâs statement, nonetheless, coincided with yesterdayâs reaction of the Senate, which expressed ignorance of the $1.5 billion loan being secured by NNPC.
To support its decision to borrow, NNPC said the law establishing the corporation authorises it to borrow in the exercise of its functions.
Sections 6 (1)(c) and 8 (1)(2) of the NNPC Act states: âThe corporation, in fulfillment of its duties can enter into contracts or partnerships with any company, firm or person, which in the opinion of the corporation will facilitate the discharge of the said duties under this Act.
âSubject to the other provisions of this section, the corporation may from time to time borrow by overdraft or otherwise howsoever such sums as it may require in the exercise of its functions under this Act and the corporation shall not, without the approval of the National Council of Ministers, borrow any sum of money whereby the amount in aggregate outstanding on any loan or loans at any time exceeds such amount as is for the time being specified by the National Council of Ministers.â
The petroleum ministry had in a report last year disclosed that NNPC was indebted to major commodity traders, including Glencore and Mercuria, to the tune of $3.5 billion in unpaid fuel supply bills.
A Reuters report yesterday, which cited a report last year commissioned by the ministry, stated that a list of creditors published in an oil report earlier this year, showed there were 35 firms still owed for fuel.
The list showed that Glencore was owed $138 million, Vitol was owed $198 million and Trafigura was owed $53 million.
The debts for some individual trading companies are widely thought to be much higher due to exposure via subsidiaries and partner firms.
For example, Bermuda corporate registration documents showed that Calson, owed $115.11 million by NNPC, was using Vitol’s Geneva address.
Similarly, Napoil, owed $75.6 million, is a partner of Trafigura, its website showed.
The inability of the Federal Government to pay the corporation over $8.1 billion in outstanding subsidy claims is said to be straining its ability to import petrol and has strained its finances after private companies stopped importing early last year.
But giving an update on the subsidy payments, the Coordinating Minister for the Economy and Minister of Finance, Dr. Ngozi Okonjo-Iweala, said yesterday that the finance ministry had as at December 31, 2012 released the N161.6 billion approved by the National Assembly as supplementary budget for subsidy payments.
Okonjo-Iweala, in a statement by her media aide, Mr. Paul Nwabuikwu, refuted media reports (not THISDAY), which alleged that the ministry was blocking verified payments to marketers.
According to the statement, the finance ministry made the N161.6 billion supplementary budget for subsidy payments, which had been approved by the National Assembly, available to the Central Bank of Nigeria (CBN) since December 31, 2012.
The statement read: âThe payments are presently going through the CBNâs processes which include the conversion of the dollar equivalent from the Excess Crude Account (ECA) and will be concluded soon.â
The release also noted that payments totalling N94 billion had been verified for 23 marketers who would be paid in the next few days.
âWe are committed to paying all companies who deserve to get subsidy payments just as we will not pay undeserving firms. That is the mandate we have from the president,â the minister said.
Meanwhile, the Chairman, Senate Committee on Petroleum Downstream, Senator Magnus Abe, yesterday said that the legislature was unaware of the $1.5 billion loan that NNPC is in the process of securing to finance fuel imports.
He said in a statement in Abuja that NNPC had not informed the Senate about the transaction.
âAs at yesterday afternoon, there was no record of the loan deal before us. We are still trying to confirm the loan from NNPC.
âThe committee read about the loan deal in the newspapers like other Nigerians and we have had concerned Nigerians calling to ask whether the National Assembly approved the loan,â he added.
The senator explained that while the lawmakers were also worried about the development, there was no record of such a deal before the committee that has oversight over the corporation.
Also responding to THISDAY enquiries on the deal, Chairman, Senate Committee on Media and Public Affairs, Senator Enyinnaya Abaribe, corroborated Abeâs submission that the Senate did not approve the loan deal.
He said: âUnder the law, no government agency can borrow without the approval of the National Assembly.
âWe have to know if that was done first, but then the question to ask under the circumstances is: What happened to the N161 billion supplementary appropriation that was approved by the National Assembly to take care of the shortfall in the fuel subsidy budget, particularly to ensure steady supply of petroleum products during the yuletide?â
The loan, brokered by Standard Chartered Bank Plc, will be repaid over five-and-a-half years, while the NNPC has put up 15,000 barrels per day of its oil production as collateral.
Nigeria Missing Money
Every leader sitting on Nigeria money with his or her evil power is sitting on a time bomb;
Oh God! Arrest them, expose them, disgrace them and prosecute them in Jesus name. Amen.
Williams Adeleye