NEITI audit: FG earns $143.5bn in 3yrs

0 0
Spread the love
Read Time:4 Minute, 18 Second
The sum of $143.5 billion was the total financial flow to the federation and other government entities from 2009 to 2011, the Nigeria Extractive Industries Transparency Initiative, NEITI, report assessing and reconciling financial flows within Nigeria’s oil and gas industry stated.
The report released last week indicated that the amount showed a decrease of four percent as against the 2006-2008 audit record of $148.8 billion.
NEITI said the decrease was largely due to a 50 percent reduction (from $60 billion to $30 billion) in 2009, arising from a drop in the applicable average oil price (from $100 per barrel in 2008 to $63 in 2009) despite fairly consistent production volumes. The increase in average oil prices in 2010 and 2011 (from $80 to $112 –per barrel) led to increased financial flows observed in the subsequent years with a total flow of $68 billion in 2011.
According to NEITI, flows to the Federation Account are $131.7billion or 91.8 percent of total flows compared to $143.8 billion 96.6 percent of 2006-2008 audit, while flows to states are $1. billion (1.1 percent of total flows) as compared to $552 million (0.4 percent) of the previous audit.
The flows to other Federal Government entities including Niger Delta Development Commission, NDDC and the Tertiary Education Tax (TETFUND) are $3.2 billion as against $2.5billion in 2006-2008.
The NEITI report also stated that flows to NDDC are directly made to the agency and outside the purview of the National Assembly through the Appropriation Act whilst that of the TETFUND is paid to a designated account in the Office of the Accountant General of the Federation (OAGF) as stipulated by the enabling act.
Furthermore, financial flows from the sale of crude oil and gas amounted to $81.9 billion which constitutes 57 percent of the total flows against $97.6 billion or 66 percent of the total flows in the previous audit. The proportion of export crude oil and gas sales to total sales of crude oil and gas reduced to 53 percent ($52.8 billion) in the period 2009-2011, when compared to 62 percent ($65.7billion) from 2006-2008. On the other hand, the proportion of the domestic crude oil and gas sales increased from 35 percent ($37.2billion) to 42 percent ($41.5billion).
Oil, gas export
According to the report, the export crude oil and gas sales flows to the Federation Account are affected by the Alternative Funding (AF) arrangements, such as Modified Carry Agreements (MCA), adopted to support production activities in the event of inadequate normal joint venture cash call funding.
In these cases, direct entitlements (in kind payments) are made from production to cover production costs as well as for funding repayments. However, there are slight increases in the financial flows from gas and feedstock as a result of increased gas processing, reduction of gas flares and the utilization of feedstock by Nigeria Liquefied Natural Gas, NLNG.
Confirmed financial flows, which are flows that are directly attributable to activities within the industry (such as petroleum profit tax, PPT, royalty, signature bonus and concessional rentals and statutory contributions), maintained relative proportion to total financial flows by staying in the region of 30 to 32 percent. Also, individual striking increases were noted in royalty on gas as well as in gas flaring penalties indicating increased attention on gas utilization.
It noted that no bid rounds were conducted during the period under review, hence the flows reported for signature bonuses arose from the payment of arrears of signature bonuses. Other flows to the Federation Account (such as company income tax and value added tax) showed a consistent relationship in the financial flows increasing from 2 percent to 4 percent.
The drop in company income tax, CIT, receipts between 2010 and 2011 is said to be due to the timing difference in the payment of CIT on gas of $128.7 million by Mobil Producing Nigeria Unlimted for 2011 in July 2012.
The report also noted that the financial flows from NLNG include dividends and repayment of loans of which an amount of $4.84 billion was received by NNPC. However, it was confirmed that these amounts have not been remitted to the CBN/NNPC JP Morgan Account or Federation Account.
NEITI pointed out that this has been a recurring issue as an amount of $3.996 billion was also reported as received but not remitted by NNPC in the previous audit.
It also observed that there is need to confirm the ownership of the 49 percent investment in NLNG, “Is it for the benefit of the Federation, or the Federal Government, or NNPC itself? This is an area for further enquiry,” it stated.
Other flows involving taxes on income (PAYE) and withholding taxes show a consistent trend with the previous audit as well as in relation to the activity volume and their location of collection. PAYE flows to the states, where most of the operating companies are domiciled, however, show a significant increase from $452 million in the previous audit to the current $1.53billion.
 
Happy
Happy
0 %
Sad
Sad
0 %
Excited
Excited
0 %
Sleepy
Sleepy
0 %
Angry
Angry
0 %
Surprise
Surprise
0 %

Facebook Comments

Previous post NIGERIA: FG has no money to pay off electricity workers – NUEE
Next post Delta State: Ministerial Press briefing suspended

Average Rating

5 Star
0%
4 Star
0%
3 Star
0%
2 Star
0%
1 Star
0%

Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.