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Executive Secretary, Nigeria Extractive
Industries Transparency Initiative, Waziri Adio
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The Executive Secretary,
Nigeria Extractive Industries Transparency Initiative (NEITI), Waziri Adio,
says Nigeria lost at least US$9 billion in 2013 to sharp financial practices in
the oil and gas sector.
News
Agency of Nigeria report continues:
Mr.
Adio stated this while briefing the Senate on the agency’s 2013 audit report on
the oil and gas sector and solid minerals sector in Abuja on Wednesday.
He
said Nigeria lost US$5.9 billion and ₦20 billion to inefficient practices and
theft, among other things, and that US$1.7 billion 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 US$62.9 billion 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 US$3.8
billion and ₦358 million.
“The
second category is the category of losses. Because of some inefficient
practices and theft among other things, the country lost US$5.9 billion and ₦20
billion.
“₦20
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 ₦20 billion.
“Under
the category of the under-assessed, the country lost US$599.8 million.
“When
we look at the non-remitted, US$1.7 billion 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.
Mr.
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 US$1.8 billion by Department of Petroleum Resources
(DPR).
“NPDC
paid only US$100 million out of the US$1.8 billion, meaning there is an
outstanding of US$1.7 billion and even the US$100 million 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,’’ he said.
“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.
The
NEITI boss said the audit report revealed infrastructural deficit in the oil
and gas sector, revealing that lack of metering among other things, had serious
implication on the country’s revenue and security.
He
said though the country could account for exports, it could not say
authoritatively the quantity of oil produced.
He
attributed the losses incurred in the sector to systemic and governance issues
that needed to be addressed.
“After
we released this report many Nigerians expressed outrage about the amount of
losses, about the amount of money unremitted and all of that.
“The
outrage is good but outrage is not a strategy; we need to come up with strategy
to make sure that what happened in the past will not happen again.
“As
a country we have to decide, do we want to make sure that we put systems and
structures in place that will make sure that there are sanctions for
misdemeanours?’’ he said.
Mr.
Adio called on the National Assembly to consider the audit report in the
passage of the Petroleum Industry Governance Bill (PIGB) to address some of the
issues in the sector.
He also called on the National Assembly to increase the powers of the agency to enable it to punish offenders.
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