new report on Thursday said despite President Muhammadu Buhari’s
attempt at ensuring transparency in the oil sector, the Nigerian
National Petroleum Corporation, NNPC, still withholds billions in oil
revenues from the government account.
report by the Natural Resource Governance Institute, titled “NNPC still
holds blank check” said that within the first six months of the Buhari
administration, the NNPC withheld over $4.2 billion (about N824.7
billion) out of a total of $6.3 billion (N1.24 trillion) revenues
realised from crude oil sales in the second half of 2015.
withheld revenues represented about 66 per cent of the total revenue –
$1.4 billion earnings from Nigeria’s regular crude oil exports for the
period; $3.4 billion from domestic crude oil sales, and $1.5 billion
from oil sold from the corporation’s upstream subsidiary, the Nigerian
Petroleum Development Company, NPDC oil fields. The report said only $2.1 billion (about N413.7 billion) was transferred to the Federation Account.
group said the unremitted revenues for the six months was about 14 per
cent more than the amount withheld by the corporation under the Goodluck
Jonathan administration in the first half of 2015, and about 12 per
cent higher than the share withheld in 2013 and 2014.
report said the figure of unremitted oil revenues in 2015 contrasted
sharply with 2005 figures, which showed the NNPC remitted about 68 per
cent of its total oil sale earnings to the Federation Account and kept
only 32 per cent that year.
report said while part of the withheld funds was used for servicing
Nigeria’s share of the joint venture operating obligations, the NNPC did
not fully explain what the other retained revenues from domestic crude
and NPDC oil sales were used for.
general, the report said despite the on-going reforms in the oil
sector, the NNPC under the present administration was still retaining a
major share of oil sale earnings and spending at will.
of the reforms by the Buhari government, the report noted, have cut the
number of passive, well connected middlemen that pocketed billions of
oil revenues, while the administration has cancelled costly, unbalanced
NNPC swap contracts as well as seek more efficient replacements.
report lamented that recent announcements on NNPC reforms and the
latest drafts of the Petroleum Industry Bill, PIB, by the Ministry of
Petroleum Resources, failed to adequately address how NNPC and the
government would share future oil revenues “Until
government establishes a clear, legally enforceable rule governing
which revenues NNPC can keep and how they can be spent, oil sector
corruption and waste could return to their prior devastating levels once
the president (Buhari) leaves, or prices rise,” the report noted.
encouraging government to push ahead with its reform plans for the oil
sector, NRGI stressed the need for NNPC to adopt new financial controls
and transparency measures for its subsidiaries, especially bordering on
the several billion revenues retained each year from NPDC operations and
its oil trading and marketing subsidiaries.
Institute also called for the immediate replacement of the 445,000
barrels per day crude oil allocation for domestic refining with a
fit-for-purpose mechanism for supplies to the country’s four refineries.