How NNPC, security agencies collaborate to reduce oil theft incidences — Kyari
…differs with Reps on $5bn unremitted crude oil revenue
By Levinus Nwabughiogu – Abuja
Group Managing Director of the Nigerian National Petroleum Corporation NNPC has said that the decline in oil theft was as a result of concerted efforts made by by the corporation and the security agencies.
Mele spoke at the resumed investigative hearing of the Ad-hoc Committee of the House of Representatives investigating crude oil theft.
He said: “From where it was in 2015 till today, there’s significant decline in the losses that we suffer in terms of other things or vandals in the country. And this didn’t come from the blues, but there were concerted efforts by the industry, by NNPC and also I must commend the security agencies to curtail the excesses but they still do occur.
He also promised to henceforth make available Corporation’s transactions information with the committee.
“And I take responsibility for whatever gaps, we will provide them so that the House will be properly provides with the information that are required for further action and analysis that you will like to take.
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“There are always discrepancies in the data between NNPC and other agencies of government, even between us and our partners. And this is also not surprising because typical practice in the industry is the point of recording, audit, the timing of recording always determines what numbers that you return with because it’s a very very mobile environment because the data you have today is not the same thing tomorrow.”
Kyari also responded to allegations on under-lifting of crude oil, giving details and shortfalls in revenue remittances into the federation account.
“This may not be far from the very fact that even though you have average of 57% equity in all our JVs, belonging to the NNPC, you do not have the right to lift 57% of the that equity or almost 60% as the case may be. In some assets we have 60%, in some we have 55.
“In all cases, you cannot lift that equity level because there are a number of financing arrangements that are on ground which mandate you to cede some of your production to your partners so that you can pay up for their own contribution to those loans. So to that extent, you see it as under-lift but when the details are brought on the table, you will discover that those are unavoidable and you so have to pay back for loans that you have taken.
“When you have multiple accounts of government on taxes and for royalties, and for profit oil all of them end up in the consolidated crude revenue account so when you look at them in isolation it will appear as if there’s an underpayment or short payment on many of these accounts but in reality, when the consolidated accounts are looked at they will turn out to be correct.
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“Very often we also expect 100% payment of these values of the crude oil and that is all not possible because of the existing fiscal arrangement that is in place which mandates or out the burden on NNPC to carry out certain projects of Government or on behalf of all of us and ultimately the net value you deliver to the Federation will be less than the value of the crude oil that you see. So every often auditors pick it up a under-remittance forgetting also the responsibilities that are there for you to bear all your cost before delivering to the Federation Account”, he said.
Earlier, the Chairman of the ad-hoc Commitee and deputy majority leader of the House, Hon. Peter Akpatason had expressed concerns over the discrepancies in the various documents submitted by NNPC and other agencies.
He said that the mandate of the committee was to identify and proffer lasting solutions to the challenge of oil losses in the country.
“As responsible citizens, it is our collective responsibilities to see to the end of the economic crisis in the oil sector.
“It is however very worrisome that the Ad-hoc Committee requested for some specific information particularly the certified true copies of oil royalty, PPT, entitlement of proceeds of production sharing contract for 2005 and 2019, after a long delay, the submission received works from 2003 to 2009, leaving out the chunk of the years that we are suppose to be looking at.
“I will like to bring a notice that in the cause of this investigation the Ad-hoc Committee through forensic analysis of whatsoever submission from various stakeholders in the sector observed huge discrepancies in their submissions made by various agencies of government, particularly DPR and NNPC.
“These variances range from figures on offshore processing of crude oil, DSDP swap, processed crude oil by the three refineries, conversion of crude oil to export, FIRS borrowing crude oil to …non remittance of funds amounting to about $5 billion into the Federation account.
“Records have it that under-lifted between 2005 and 2019 is averaged loss of about 604,000 barrels per day. The aforementioned are some of the areas the Ad-hoc Committee will like to request for some clarification as the proceedings proceeds,” Akpatason said.
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