The Nigeria Extractive Industries Transparency Initiative, (NEITI), has asked the federal government to immediately revisit and re-evaluate the transfer of some oil assets by the Nigerian National Petroleum Corporation (NNPC), to its upstream industry subsidiary, the Nigerian Petroleum Development Company, NPDC.
The Executive Secretary of NEITI, Waziri Adio, made the call recently in Abuja as part of the transparency agency’s continued review of the highlights of its latest edition of NEITI Policy Brief entitled “Unremitted funds, oil sector reforms and economic recovery.”
Mr. Adio underlined the importance of the review, considering NNPC’s under-valuation and refusal to pay for the assets, adding that the review was necessary in view of NPDC’s inability to either make returns on investments on the assets, or be accountable to the federation over its management of the oil assets in its custody.
The NEITI Policy Brief has put the total unremitted revenues to the federation by the NPDC at a total of N1.76 trillion, consisting $5.5 billion and N72.4 billion.
Details of the outstanding revenues by the NPDC to the Federation Account in respect of the transferred oil assets by the NNPC include $1.7 billion in respect of the transfer of right oil mining leases, OMLs from the Shell Petroleum Development Company, SPDC joint venture.
Another $2.23 billion was also outstanding in respect of the transfer of four OMLs from the Nigerian Agip Oil Company, NAOC JV. NEITI report said the NPDC was yet to refund about $148.3 million and about N2.42 billion, being cash-calls paid to it by the federal government for the transferred OMLs. Other outstanding revenues unaccounted for also include legacy liabilities of $1.46 billion and N70.02 billion.
“Beyond the issue of unremitted monies, there are issues of transparency and efficiency with the operations of NPDC,” NEITI noted in its report. ‘‘Since 2005, NNPC has transferred 16 OMLs to NPDC. However, the process of transfer of these assets raises serious questions, as there appears to be no clear-cut criteria for transfer of oil mining assets to NPDC.