Wednesday 15 June 2016

How Nigeria Lost Over $9billion in Stolen, Unremitted Oil Money in 2013 - NEITI Boss Reveals

The Nigeria Extractive Industries Transparency Initiative (NEITI) has revealed that Nigeria lost at least $9 billion in 2013 to sharp financial practices in the oil and gas sector. 

Waziri Adio
Speaking while briefing the Nigerian Senate on the 2013 audit report on the oil and gas sector and solid minerals sector in Abuja on Wednesday, Waziri Adio, the Executive Secretary, Nigeria Extractive Industries Transparency Initiative (NEITI), says Nigeria lost at least $9 billion in 2013 to sharp financial practices in the oil and gas sector.
Disclosing further, he said Nigeria lost 5.9 billion dollars and N20 billion to inefficient practices and theft, among other things, and that 1.7 billion dollars was still owed to the federation from oil mining leases (OML).
“In 2013 the country produced 800.3 million barrels and out of that, the country made 58.07 billion dollars and that represents an eight-per cent reduction from the 62.9 billion dollars the country made in 2012.

“The issue is that there are some monies that were withheld, lost or underpaid for different reasons.

“The first is in the category of the non-remitted, and the non-remitted amounted to 3.8 billion dollars and N358 million.

“The second category is the category of losses. Because of some inefficient practices and theft among other things, the country lost 5.9 billion dollars and N20 billion.

“N20 billion was lost because the Nigerian National Petroleum Corporation (NNPC) did not observe the 90 days credit grace.

“Looking at the time value of money, if you calculate at 12 per cent interest, the country lost N20 billion. Under the category of the under-assessed, the country lost 599.8 million dollars.

“When we look at the non-remitted, 1.7 billion dollars is still being owed the federation for OMLS. Those are the monies we have established that should have been paid to the federation and were not paid,’’ he said.
Adio also said that the audit report revealed that the NNPC divested some monies that should have been transferred to the federation account.
“NNPC, between 2010 and 2011, divested eight assets that belong to the federation to its upstream subsidiary, Nigerian Petroleum Development Company (NPDC).

“So, NNPC divested 55 per cent of the shares being held on behalf of the federation to the NPDC. These eight OMLS are valued at 1.8 billion dollars by Department of Petroleum Resources (DPR).

“NPDC paid only 100 million dollars out of the 1.8 billion dollars, meaning there is an outstanding of 1.7 billion dollars and even the 100 million dollars was paid two years after.

“What this means is that NNPC lifted oil on behalf of NPDC not on behalf of the federation in spite of the fact that NPDC has not fully paid for those assets.

“Another issue is the losses incurred from swap and crude oil offshore processing agreement (OPA). This is the arrangement where NNPC exchanges crude for product and the country lost 518 million dollars due to the inefficiency of the swap and OPA,’’ he said.

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