Barely 24 hours after the Central Bank of Nigeria expressed concern over alleged politicisation of the letter written by its Governor, Sanusi Lamido Sanusi, to President Goodluck Jonathan notifying him of the non-remittance of $49.8 billion oil revenues into the Federation Account by the Nigerian National Petroleum Corporation (NNPC), the corporation has responded, saying the CBN is actually the one playing politics with the issue.
The Group Managing Director of NNPC, Andrew Yakubu, at a press briefing in Abuja stated that he was forced to believe that the CBN may have decided to add to Nigeria’s already heated political atmosphere with the letter.
Said Yakubu: “I want to say that the allegation is unfounded, baseless and has become a political instrument in the current politically- charged environment."
Yakubu said the NNPC was taking aback by the CBN letter because the issue came up about four months ago.
“In fact, we made our clarification through our honourable minister of petroleum resources, four months ago and for it to surface at this time that the political atmosphere is charged, we find it difficult because we are also taken aback and it is left for you journalists to do your investigations and unravel the reasons behind all these," he said.
The NNPC boss said, “As you are well aware, it is not in our character to join issues or trade blames with other agencies of government. But considering the high level of publicity that the recent letter from the CBN to the President has generated, and the erroneous impression it has created among Nigerians. It has become necessary to set the records straight.
“The statement credited to the CBN governor that NNPC has failed to remit the sum of $49.8bn representing 76% of total national oil receipts is borne out of lack of understanding of how revenues from crude oil sales are remitted into the Federation Account.”
He said NNPC crude oil liftings are made up of Equity Crude, Royalty Oil, Tax Oil, Volume for Third Party Financing and NPDC equity volume.
“It is important to stress that remittances of proceeds from the above liftings are made according to statutory and production arrangements.
Accordingly, proceeds from Equity Crude are paid by NNPC into the Federation Account which is held by the Central Bank of Nigeria. Proceeds from Royalty Oil are paid to Department of Petroleum Resources, DPR, whose designated account is managed by the same CBN.
“Similarly, the proceeds from Tax Oil or Petroleum Profit Tax lifted by NNPC are paid directly into the Federal Inland Revenue Service account also managed by the CBN.
"In the same vein, Third Party Finance and Trial Marketing volume are paid into designated Escrow accounts, while NPDC equity proceeds are remitted to NPDC account. It should now be clear to all that NNPC by statutory requirement is responsible for direct remittances of only one stream of liftings, namely Equity Crude.”
Yakubu said that proceeds from the total NNPC liftings comprising Federation Equity, Royalty Oil, Tax Oil, Volume for Third Party Finance, NPDC equity and volume for Trial Marketing Period amounted to US$67.12bn as against the $65.33bn that the CBN stated.
“At this point, we wish to categorically state that all the proceeds amounting to $67.12bn have been remitted as statutorily required. NNPC remitted its portion which is $18.48bn into the Federation Account being the total proceeds from Equity Crude and gas sales. This represents 27.5% of total proceeds of $67.12bn as against the 24% declared by CBN.
“On the issue of US$49.8 billion or 76% of total national liftings and the alleged unremitted funds, we would like to clarify that this represents the proceeds from Royalty and Petroleum Profit Tax liftings. These, as I stated earlier, are remitted to the Department of Petroleum Resources (DPR) and the Federal Inland Revenue Service (FIRS) which are statutorily empowered to collect and remit same into the Federation Account.”
Yakubu explained that CBN’s decision to come up with the issue, four months after it was allegedly discovered was suspicious, adding that it would be appropriate for the Nigerian media to thoroughly investigate the underlying intentions of the CBN with regards to the issue.
He said: "We are taken aback because in my presentation, you saw clearly that there was hardly any operation that the NNPC does alone.
“It is a multi-agency transaction and right from our production containment and entitlements meetings, all the various agencies that are involved in crude oil production are involved in the meetings and reconciliation is done with lifting numbers agreed and signed off before the lifting of our crude oil.
“Operations at the terminals are also done by all the various agencies and particularly championed by the regulatory agencies that are the arbiters of numbers and superintend over the process. NNPC is not a sole player in the entire business of the oil and gas value chain; so, our functions are purely professional and we also have avenues to reconcile from time to time and we have no option whatsoever to determine the reconciliation of the numbers and our operations with all other agencies.”
Speaking on CBN’s knowledge of the crude oil revenue processes, Yakubu explained: “All the documents are there and the data was collated from them. I will not say that the CBN is not aware of all these because they are always at the documentation and reconciliation meetings; they also signed off on the documents that is why I will continue to say that we are all dumbfounded because we are always available for any form of clarification by any agency of government and particularly that the honourable minister ordered this audit months ago before we even got the letter from the CBN.
“You can imagine that the letter came four months ago and it took a snapshot of 18 months. So, why would we wait for 18 months before we write a letter of a very serious issue like this; $49 billion is not a small money; it is an amount that can even shake the US economy and not one that you can just stock under your shelves. That is why we always make sure that our records are always intact.”
Yakubu who also noted that the NNPC does not withhold crude oil receipts due to the federation account or any statutory remittance, added: “The CBN letter claims that for the period 1st January 2012 to 31st July 2013, total national crude oil lifting was 1.287 billion barrels. Our records show that the total national crude lifting for the same period was actually higher at 1.330 billion barrels. Furthermore, total NNPC lifting during the same period was again higher at 618.552 million barrels as against the 594.024 million barrels stated by CBN.”
On the audit exercise being undertaken by PricewatershouseCoopers (PwC) on the operations of NNPC, Yakubu said: “It was ordered by the minister of petroleum resources some months ago and they are about rounding off the audit exercise; it is normal. Last year, we had a similar one and we are supposed to go through an audit on regular basis, that is ongoing and will soon be concluded and handed over to the honourable minister.”
The CBN had on Thursday sought to provide clarifications on the letter written by Sanusi in relation to its role. It said: “In the performance of this role, it is natural for the CBN to be concerned at the low level of accretion to reserves and the ECA, in spite of strong international oil prices, especially as Nigeria’s performance is compared with oil producing economies.”