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$1.48 Billion: No Money’s Missing, NNPC Insists


The Nigerian National Petroleum Corporation, NNPC, yesterday, insisted that no money is missing and that neither it nor any of its subsidiaries were indicted in the forensic audit report released by PriceWaterHouse Coopers.

Addressing journalists on the audit report in Abuja, Mr. Joseph Dawha, Group Managing Director, NNPC, disclosed that the entire revenue accruable to the Federation Account during the period have been accounted for in the report.

He blamed the delay in the remittance of the amount on the unfinished reconciliation process between NNPC, the Department of Petroleum Resources, DPR and other agencies of government.

According to Dawha, the $1.48 billion was not part of the alleged unremitted revenues from crude oil sales, but the balance of the good and valuable consideration of the divested assets as assessed by the DPR.
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He said: “The issue of the outstanding $1.48 billion Nigerian Petroleum Development Company, NPDC, Signature Bonus is, in fact, the balance of the book value of the divested assets as assessed by DPR, yet to be paid into the Federation Account by NNPC.

“This does not in any way constitute an indictment. Meanwhile, this value is still being reconciled with the Department of Petroleum Resources, DPR.”

Legal backing

On the issue of the NNPC defraying its costs and expenses and that of its subsidiaries from crude oil revenues, Dawha explained that NNPC Act empowers the corporation to do so.

He said: “Though the report recommended that the laws be reviewed to make NNPC meet its costs and expenses entirely from the value it creates, however, it should be noted that NNPC currently receives no funding for value destruction through pipeline vandalism, sabotage and crude oil and products theft.”

On the kerosene subsidy issue, Dawha maintained that the forensic audit report also clarified that subsidy on Dual Purpose Kerosene, DPK, is still in force, as the Presidential directive of October 19, 2009, was not gazetted in line with the provisions of the Petroleum Act of 1969.

Also speaking, Mr. Bernard Otti, Deputy Group Managing Director, NNPC, said the inability of NNPC to discontinue the payment of subsidy on kerosene is due to the fact that the Presidential directive does not conform with the law and also due to labour officials, who prevailed on the Presidency not to implement the directive.

He said: “When the President made the directive, labour officials approached the President, prevailing on him not to continue with the plan to remove subsidy on kerosene, due to the hardship the category of people, who are major users of the commodity, will face.

“Following the appeal, the plan was stopped, and the Minister of Petroleum Resources was unable to implement the directive.”

On NNPC restructuring

On the call for the restructuring and reorganization of NNPC by the report, Mr. Timothy Okon, Group Coordinator, Corporate Planning & Strategy Division, NNPC, explained that plans for the restructuring of NNPC is already contained in the Petroleum Industry Bill, PIB, adding that “when the PIB is passed, the proposed structure of NNPC will be encoded into law.”

He blamed the ‘unnecessary expenditure of NNPC’ stated in the report on the difficult operating terrain of the oil and gas industry.

According to him, the huge cost incurred by NNPC is attributable to the high incidence of pipeline vandalism and crude oil theft.

Speaking in the same vein, Mr. David Ige, Group Executive Director, Gas and Power, said over the last couple of months the country had recorded an unprecedented level of pipeline vandalization.

He added that the costs of fixing the pipelines after every case of vandalism is huge.

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