NNPC, Shell, Total, Mobil, others fleeced Nigeria of $4.4bn — NEITI

The Nigerian Extractive Industries Transparency Initiative (NEITI), yesterday, accused the Nigerian National Petroleum Corporation, NNPC, and other oil and gas companies of shortchanging the country and failing to remit $4.4 billion and N358.3 billion to the Federation Account in 2013.

This comes as Lagos-based indigenous chartered accounting firm, SIAO Partners, had been contracted by NEITI to carry out the 2014 audit, even as it is in the process of procuring auditors for its 2015 audit.


Minister of Solid Minerals and Chairman of NEITI Board, Dr. Kayode Fayemi, who disclosed this in Abuja, during the release of the 2013 Oil & Gas and Solid Minerals’ Audit Reports, also revealed that Nigeria lost $5.966 billion and N20.4 billion in 2013 to crude oil theft, Offshore Processing Agreement, OPA, and Crude Oil for Product Swap Arrangement.

Oil, gas earnings

The NEITI report further stated that the country earned $58.07 billion from oil and gas sector, dropping eight per cent from $62.9 billion realised in 2012, adding that the sum was earned from crude oil sales, taxes, royalties and other incomes.

Explaining the decline in oil and gas earnings in the year under review, NEITI attributed this to a drop in oil and gas sales, following divestment of federation equity in some oil assets and crude oil losses.

In addition, the report noted that N33.86 billion accrued to the federation from the solid minerals sector in 2013.

Broken down further, cement manufacturing companies accounted for N30.47 billion or 89.98 per cent of the total; construction companies, N1.98 billion or 5.83 per cent and; mining & quarrying companies, N1.42 billion or 4.19 per cent respectively.

Giving a breakdown of the figures in the oil and gas report, Fayemi said NNPC and its sub-units failed to remit $3.8 billion and N358.3 billion in 2013, while $599.98 million was under-assessments/underpayments of petroleum profit taxes and royalties by oil and gas companies.

In the case of the NNPC and its sub-units, the report stated that outstanding payments were due from unpaid considerations from divested Oil Mining Leases, OMLs, cash call refunds from the National Petroleum Investment Management Services, NAPIMS; and Nigerian Petroleum Development Company, NPDC, liftings from Nigerian Agip Oil Company, NAOC, Joint Venture, JV, among others.

Under-payments  not true  —NNPC/NAPIMS

But in a quick response, NAPIMS, the investment arm of the NNPC, in charge of vetting and approving oil and gas ventures and expenditure in Nigeria, insisted that it was not true.

NNPC’s spokesman, Mr. Mohammed Garbadeen, refused to pick his calls. But his NAPIMS counterpart, Mr. Laminu Ahmed, in a telephone response said: “I also read it (report), but it is not true. Let them cross-check the records because that amount is too high. Nobody can do such a thing and other organisations did not know until now.”

Ahmed argued that since NAPIMS approved all of the Joint Ventures, JVs and Production Sharing Contracts, PSCs, and other oil and gas industry investments in Nigeria, such underpayments “are simply not possible.”

NLNG dividends

Specifically, the report accused the NNPC of failing to remit $1.289 billion Nigeria Liquefied Natural Gas, NLNG, dividends, interest and loan repayment for the year under review, despite acknowledging receipt of the said amount from the NLNG.

To this end, the report stated that with the 2013 figure, the total NLNG payments received by the NNPC between 2005 and 2013, but not remitted to the Federal Government or the Federation Account, now stood at $12.9 billion.

The report also stated that the NNPC only remitted $100 million in 2014, of a total $1.8 billion expected from the divestment of its 55 per cent equity stakes in eight oil assets from the Shell JV to its subsidiary, the NPDC,  adding that the NNPC failed to pay for crude oil lifted from these oil assets on behalf of the NPDC.


Shell, Total, Mobil fingered in  under-payments

In the area of oil and gas companies shortchanging the country to the tune of $599.98 million, the report identified Total Exploration and Production Nigeria Limited, TEPNG; Shell Petroleum Development Company, SPDC, and Mobil Producing Nigeria Unlimited, MPNU, as the worst offenders in the area of under-assessment/under-payments in the Petroleum Profit Tax, PPT, validation, while SPDC, Shell Nigeria Exploration and Production Company (SNEPCO) and Pan Ocean were worst offenders in terms of royalty validation.

Specifically, Total, SPDC and Mobil were fingered in under-assessments/under-payments of $294.87 million, $53.9 million and $49.207 million respectively in Petroleum Profit Tax; while SPDC, SNEPCO and Pan-Ocean were fingered in $73.16 million, $50.946 million and $28.006 million royalty under-assessments/under-payment in the period under review.

However, none of the IOCs mentioned responded to Vanguard enquiries by calls, texts or electronic messages. While Total promised to provide its response tomorrow (today), Mobil urged that it be “allowed a reasonable response time, given the timing of your inquiry.” Shell simply did not offer a response of any kind.’’

JV/PSC valuations

With regard to JV and PSCs valuations, the NEITI report further said: “The value of under-assessment on the fiscal valuation of chargeable oil was over $431.5 million.

“The JV companies had the highest under-assessment of over $410.9 million followed by the PSCs with over $15.8 million and Marginal Fields/Sole Risks with $6.7 million.

“The under/over assessments were computed based on the advised pricing methodology by NNPC-COMD as against pricing methodologies used by the companies.

“For instance, SPDC applied a different pricing methodology against the prices advised by NNPC-COMD, resulting in revenue loss of over $6.2 billion in the last eight years.”

On royalty

In the area of royalty, the NEITI report stated that the lingering pricing dispute between International Oil Companies, IOCs, and the Nigerian government had resulted in revenue loss of over $4.2 billion in the last eight years.


On royalty

In the area of royalty, the NEITI report stated that the lingering pricing dispute between International Oil Companies, IOCs, and the Nigerian government had resulted in revenue loss of over $4.2 billion in the last eight years.

The report added that “the royalty payable on crude oil by companies is a function of the value of the crude oil, which in turn is determined by the price. There have always been issues over the pricing mechanism to be adopted in the computation of royalty, that is, whether Official Selling Price, OSP, as determined by NNPC, or Realisable Price (RP), as determined by companies, should be used.

“Royalty under assessments decreased from $465 million, comprising 30 entities, in 2012 to $166.54 million, comprising 17 entities, in 2013, representing a decrease of 64 per cent. The under assessment recorded was mainly as a result of price differentials between the official government position and that of the oil companies.

“The Production Sharing Companies, PSCs, entities had the proportion of 34 per cent under-assessment, while the JV entities had 65 per cent. Total under assessment from marginal fields amounted to $443.182 million, representing one per cent. This was due to the fact that reconciliation meetings were held regularly with these indigenous companies and the Official Selling Price (OSP) was applied on their production.

“The prices applied by SPDC on its royalty computation continued to differ from the advised prices of NNPC-COMD. This difference resulted in an underpayment of $73.161 million for 2013.”

Fayemi, however, noted that despite the gap of three years, most of the issues raised in the two audit reports were still relevant today and should spur the public into asking further questions.

He said: “Now that these reports are out, I will like to call on the legislature to take keen interest in the audit findings in designing legislation for the extractive sector and in carrying out oversight functions.

“Apart from making our reports more timely, more responsive and more relevant, we intend to broaden our stakeholders’ engagement, widen our dissemination platforms, make our organization more fit-for-purpose, and create more avenues for directly impacting policy change.”

Gains of NEITI audits

In defence of the gains of its series of audits and implementation of recommendations, as well as closing the gaps in un-reconciled figures, NEITI told Vanguard on phone that it had recorded significant strides.

NEITI Director, Public Affairs, Mr. Orji Ogbonnaya Orji, said: “Most of our recommendations have been implemented or are being implemented.”

He listed the success areas to include the unbundling and restructuring of NNPC, which is ongoing; remittance of NLNG dividends into the Federation Account; implementation of the Single Treasury Account; cancellation of Offshore Processing Account; and removal of fuel subsidy which has been changed to price modulation

Un-reconciled figures

With regard to un-reconciled figures arising from what companies claimed they paid and what government agencies received, Orji said: “In this report, the un-reconciled figures are very marginal, less than one percent. This is because the companies and government agencies are now becoming more responsive on EITI issues.

“Some of those wide differences between what was paid and what was received in the past were because of attitude to the audit because nobody took note that anybody was coming to check. But now, the companies and the government agencies are more responsive in keeping accurate records. So the gaps are closing up.”

“Every year, our duty is to check how much the companies pay to government in form of revenues, including taxes, royalties etc and we also check how much of these monies paid were actually received by the government either through the accounts of the CBN or through the Accountant General of the Federation or to DPR and FIRS.”


Delay in publishing report

Orji also explained that the 2013 report was delayed due to the dissolution of federal boards, saying: “This report ought to have been published by December 31, last year, but because our board was dissolved along with other Federal Government agencies’ boards. By the EITI national standard, these reports should be published every two years as approved and released by the board.

“But at the point it was about to be released to the public by December 2016, there was dissolution of the federal Boards; our board has just been reconstituted in February, and we had to allow the board sufficient time to study the report, and approval has now been given, and we now release to the public.”

Pomp, as Osinbajo stands in for Buhari on working visit

Lagos residents  yesterday rolled out the drums to meet one of their own, Vice President Yemi Osinbajo, who was a last minute replacement for his boss, President Muhammadu Buhari, on a working visit to the centre of excellence.

Although the Presidency attributed the President’s inability to come to ‘scheduling difficulties’ usually reliable sources said his security details who were in Lagos days before the date of his visit may have advised that he stayed away.

‘’Security reports did not favour the President’s coming to Lagos in person at this time, as many may boycott his events at the least, while some may have planned to do more terrible things,’’ the source said.

Yesterday’s reception for Osinbajo was however carnival-like lasting about an hour. Lagosians defied the early morning downpour to converge on the Tafawa Balewa Square, TBS, venue of the project commissioning, to receive the dignitary.

Clad in different colours of attires the residents filled the TBS almost to capacity, singing and dancing.

Osinbajo, upon arrival from Abuja, amidst tight security and after being received by dignitaries, immediately proceeded to Cappa-Oshodi where he commissioned the new Lagos State Emergency Management Agency (LASEMA) Rescue Unit and later led members of the presidential working visit team to perform the official commissioning of the Ago Palace Way in Okota.

While commissioning the projects, Osinbajo assured Nigerians that President Muhammadu Buhari has put the country on the path of recovery, in spite of the economic situation particularly, the recent hike in fuel price, even as he asked for the support and understanding of citizens.

According to him, there were plans to create 500,000 employment opportunities for graduates with another 370,000 for non-graduates.

He added that besides there would be provision of micro loan facilities for market women, using associations.

On the physical absence of the President, Osinbajo assured that Buhari would personally visit Lagos immediately after the Ramadan, “The President holds Lagosians in high esteem,” he said.

Prof. Osinbajo at the well attended and colourful event, was received by Governor Akinwunmi Ambode of Lagos State, along with the Minister for Power, Works, and Housing, Mr. Babatunde Fashola, Governor of Kebbi State, Alhaji Atiku Bagudu, members of the state executive council.

Biafra can be realised through civil disobedience – IPOB

The Indigenous People of Biafra, IPOB, has said that Biafra can be realised through civil disobedience or direct action contrary to the belief in some parts of Igboland that it cannot be achieved through demonstrations alone.


This was contained in a statement issued by IPOB and made available to Vanguard in Enugu yesterday.

The statement by Emma Powerful, entitled, ‘Biafra can be achieved with civil disobedience and direct action,’ read in part, “IPOB can categorically and experientially conclude that Biafra can be achieved by civil disobedience and direct action contrary to statements made by some saboteurs and Hausa-Fulani slaves from Igbo-speaking area.

“That Barack Obama is the president of the USA today is directly attributable to the civil disobedience of the days of Malcom-X and Martin Luther King Jr. For 27 years, the blacks in South Africa never stopped carrying out civil disobedience until Nelson Mandela was released from prison.

“The Arab Spring started with civil disobedience and the outcome is there for all to see. It is therefore preposterous and smacks of political illiteracy for some compromised people to make mockery of the well-organized and peaceful civil disobedience by IPOB that has the twin objectives of pressurizing government to release their illegally detained leader and for the restoration of the nation of Biafra. One of these saboteurs and political neophytes cum Hausa-Fulani slaves is a man called…

“Who has now distinguished himself as the latest and greatest saboteur of the restoration of the nation of Biafra. This fellow is from Alayi-Bende in Abia State. His father was a fine gentleman but unfortunately, gave birth to one of the greatest saboteurs of our time. Retired Major General Muhammadu Buhari wanted to have a negotiation meeting with the objective of finding a way out of the impasse occasioned by widespread demonstrations by the IPOB.

“The IPOB leader nominated this man to go and meet with Buhari on the assumption that he is a man of integrity and a Biafran to the core. He met with Buhari twice but never came back to Nnamdi Kanu to debrief him. Instead, he used the opportunity of meeting Buhari to cut personal deals for himself. He should return all the money he collected from Buhari.

“To cover up his track, he granted interview to a national newspaper reporter, where he displayed his crass ignorance of Nigerian politics as well as mocked the victims of Buhari’s genocidal killings in Biafraland.

“From his conducts and recent utterances, and just like his fellow sexually confused Igbo politicians who are prostitutes to Hausa-Fulani men in return for political favours, it is clear he is the present danger to the Biafra restoration process.

“He has now joined the hall of infamy of Biafran saboteurs .”

May 30, Biafra’s Armed Forces remembrance day
Meantime, members of the group has restated their determination to carry out the Armed Forces Remembrance Day ceremony scheduled for May 30, this year, in Biafran land, in memory of over 2.5 million Biafrans killed during the 1967 civil war and over 1,000 Biafran agitators killed by security forces between August 30, 2015 and now.

IPOB said there is no going back on the ceremony as scheduled, in spite of the fact that the Federal Government has concluded plans to shoot indiscriminately at their members during their proposed May 30, 2016 remembrance day peaceful assembly.

In a press statement, yesterday, IPOB said even though a discovery made by their intelligence outfit showed that the government has directed the Defence Headquarters DHQ to open fire and kill Biafrans on the D-day should they venture to embark on the assembly, whether peaceful or not, the spirits of the fallen Biafran heroes and those alive are greater than the rampaging Nigerian Armed forces put together.

We’ll resist oil exploration in Ogoni after clean-up- Rivers monarch, activist

A royal father in Rivers State, His Highness, Chief Vincent Shango-Lolo, has said that Ogoni people would not consent to oil companies carrying on further oil exploration and exploitation on their land after the planned cleanup by the President Muhammadu Buhari-led Federal Government because the people have gained nothing from oil.

 Chief Shango-Lolo, who is the paramount ruler of Kinaaben, an adversely despoiled riverside community at B-Dere River bank, Gokana local government area, lamented that the oil firms have shattered the source of revenue of the people, polluted their environment with no more aquatic life in the communities. A human and environmental rights activist, Comr. Celestine AkpoBari, also reiterated the position of the monarch that Ogoni people would not agree to any oil exploration activity in the area after government might have concluded the cleanup, saying the people would do anything to stop    further despoliation of their homeland.

When Niger Delta Voice visited the community, we observed that thick sludge allegedly stemming from an oil spill that occurred many years ago, still covered the river where the people carry out their fishing activities. The embittered monarch said: “We have not benefitted anything from oil business. We do not have good drinking water. Even common mono-pump is not in our community, yet, we are an oil producing area and we will prefer to use our land for farming.”

He expatiated: “This is an extract of the water (showed NDV water in a bowl) that people living around here drink. At a time when this thing came up, people left this place because of the health challenges that accompanied it. The whole place was burnt up and was not inhibited by any person again.

“After that time, for about 23 years now, we do not have anything here, no fish again because of the pollution, the HYPREP sign post will tell better. We are just living by the mercy of God.We have made several calls to the Federal Government about our living condition here. Recently we saw FG representatives coming to see things for themselves. For now, we have not seen anything to remedy our condition.

Expressing the community’s wish not to have their community despoiled further exploration the movement said: “There is still nothing like aquatic life in this place. The cleanup is so important to us because we want to have life again. I am a party to the call that after the Ogoni cleanup, we will not accept any other form of oil exploration in our place.”

“Because the activities of the oil explorers are criminally motivated so we do not want them again. Residents of the area, who spoke to Niger Delta Voice lamented that life has been agonizing for them because of oil exploration activities by oil companies. They said their health conditions had deteriorated and everything they have has been contaminated.

Our grouse-    AkpoBari

Similarly, a human and environmental rights activist in Ogoni, Comrade AkpoBari, called on youths of the area to avoid any act that would scare away the Shell Petroleum Development Company and the Federal Government from conducting cleanup in Ogoni.


AkpoBari, who is also the National Coordinator of Ogoni Solidarity Forum, OSF, said: “Do not do anything stupid that will make them to run away. The project will re-position our lands forgotten for long. Our people will get jobs and there will be change in Ogoniland. Just wait and support the system that will change the economy of the Ogoni people.

“Let us support the campaign of leaving the oil in the soil. After the clean up, we will not allow any further oil exploration in Ogoni because it has not benefited us in anyway,” he added.

PDP suffering from past mistakes – Okupe

Former Special Adviser to ex-President Goodluck Jonathan on Public Affairs, Dr. Doyin Okupe, has stated that the Peoples Democratic Party, PDP, is going through crisis because the party failed to prepare for life after power.

He also said the PDP is suffering from mistakes of the past.

Okupe who was a guest on Channels Television breakfast programme yesterday said failure on the part of the leaders of the PDP has further deepened the crisis rocking the party.

He said, “The crisis you are seeing today came into play because there was lack of cohesiveness on the part of the leadership and follower-ship and that is why the centre cannot hold and the party is paying seriously for that”.

“What you are seeing now are flurry signs and symptoms of failure of leadership. Before we left government or shortly after we left government, people ought to have come together knowing that we were likely going to suffer what is called electoral defeat syndrome, which has become exaggerated in our present circumstances is responsible for this” he stated.

He went further, “We love our party and we do not want PDP to scatter, even though we lost an election to All Progressives Congress, APC, it was evident that APC will not get its act together and if they do not get their acts together, a third force will emerge and that is the dream of many Nigerians.”

According to him, APC remains a party of strange bed fellows with various interests and cannot be compared to the PDP with a solid background.

“The APC, is not an association as such, it’s a conglomeration of various interests. They still do not have a party. They are not strong on ground, there are many places where they do not exist. PDP is the only party in Nigeria that has a culture, a strong background and a record of performance, yes we have some issues. There are evidence against our people involved in embarrassing forms of corruption, but that’s what happens in any human organisation” he maintained.

He however said; “The truth of the matter is that what PDP is suffering today is from the collective actions that we have taken in the past. From our failure to obey our own rules. For entrenching impunity as a standard practice in our party; for allowing people to use money to buy offices, to buy candidacy. These are consequences of those actions.”