Following the release, last Thurday, of its crude oil sales from January to July this year, the House of Representatives Committee on Finance has dismissed the $20.9 billion the Nigerian National Petroleum Corporation (NNPC) said it generated on behalf of the federation for the seven-month period, calling it a “ruse”.
In a statement issued exclusively on Sunday, the committee’s chairman, Hon. Abdulmumin Jibrin, said: “Nigerians are not as keen on crude oil sales figures as the actual remittances from NNPC to the Federation Account.
“The amount remitted to the federal government is more important and NNPC should have been more honest to present the figures so that Nigerians can understand what actually accrued.”
Jibrin, who about a fortnight ago had placed the blame squarely on the Minister of Petroleum Resources, Mrs. Diezani Alison-Madueke, and NNPC for the revenue shortfall, which had impacted on the distributable income accruable to the three tiers of government, said it took a barrage of criticisms before NNPC finally made an effort to come clean with the $20.9 billion for the first seven months of the year.
“At last it is gratifying to note that after a barrage of well-deserved criticisms from well-meaning observers of the oil and gas industry, the Nigerian National Petroleum Corporation is finally making effort to come clean with the recent release of figures of crude oil sales allegedly totalling $20.9bn for the first seven months of 2013.
“Much as this development is welcome, discerning Nigerians would be restraining their good sense of judgment if they fail to see this NNPC’s action for what it is: a ruse – a clear unintelligent effort at misleading the Nigerian public.
“This is not a surprise. A game of subterfuge is a preoccupation for which NNPC is notorious. Sadly, pushing out sham details as regards operations in the oil and gas sector has become worse under Diezani Alison-Madueke, the current Minister of Petroleum Resources,” he said.
He pointed out that the public was less interested in crude oil sales figures than the actual remittances to the Federation Account, as the latter was more important, “and NNPC should have been more honest to present the figures so that Nigerians can understand what actually accrued”.
According to him, “from January to September 2013, the federation was expected to earn N1.837 trillion (or N204.168 billion per month) from the sale of crude oil and gas marketed by the NNPC with the petroleum minister as its board chairperson.
“It should be noted that this is after taking into consideration payments for Joint Venture Cash Calls (that is, cost of production) and petrol subsidy payments.
“However, only N1.516 trillion has been remitted to the government by the NNPC showing a shortfall of N320.654 billion for the period.
“Again, it should be noted that this is actual revenue generated at the prevailing market rate of crude oil and gas. The budget for fiscal year 2013 was based on $79 per barrel, whereas the price has hardly fallen below $100 per barrel for the whole year.
“This implies that even though we are receiving way above the benchmark on our crude oil and gas sales, we are not meeting our targets because our crude oil production has fallen way below budgeted estimates as a result of massive crude oil theft and unabated corruption in the oil and gas sector.”
Jibrin said figures available to his committee showed that revenue targets were only barely met in April (N212.029 billion) and May (N210.202 billion), while in July, the target was not met (N191.549 billion) but the sum of N35.103 billion was transferred to the Excess Crude Account (ECA).
“The Ministry of Petroleum/NNPC has to be held accountable for this shortfall. The Medium-Term Economic Framework (MTEF) deliberations and revenue framework for fiscal year 2014 will have to look extensively into this worrying situation.
“If this trend is allowed to continue, it will have devastating consequences on our economy which is still dependent to the tune of over 80 per cent of total earnings on the petroleum industry,” he observed.
Jibrin further wondered why NNPC was only interested in releasing figures relating to crude oil sales, saying, “What about the proceeds from gas production? Why not let Nigerians know the total proceeds from oil and gas. And where are the dividends from gas?
“These questions have to be answered in all honesty if NNPC expects to be taken seriously. Nevertheless, the point must be made that the $20.9bn the NNPC just presented as figure for crude oil sales will provide the impetus for profound parliamentary investigations into how the figure was obtained.”
In a veiled reference to his colleagues on the House Committee on Petroleum (Upstream), who met with NNPC last week when the corporation released the figures on crude oil sales, Jibrin added: “Suffice to mention that the process that resulted in the figures presented by the NNPC were not transparent and reliable and must go through tight parliamentary proceedings as soon as possible.”
He also dismissed allegations in some quarters that he had a defined mission to undo Alison-Madueke, adding, “Let me state with all sense of responsibility that my constant intervention in the management of Nigeria’s oil and gas is borne out of a patriotic quest to entrench the culture of transparency and accountability in the way the country’s largest revenue generating sector is being run.
“Therefore, I make bold to state here and now that this is not a personal war with the minister, but a battle to right the wrongs in a system whose rot runs so deep as to depict Nigeria as a huge embarrassment not just in the comity of oil-producing countries, but also among right-thinking people of the world.
“After all, when the G-7 Governors called for the resignation of the Minister of Finance, Dr. Ngozi Okonjo-Iweala, on account of her alleged poor implementation of the 2013 budget, I was the first to disagree.
“I pointed out that they were nailing the wrong person because the poor showing of the budget is attributable to the shortfall in oil revenue which is not helped by the ongoing massive oil theft in the Niger Delta.
“My message to the governors then was that instead of the Minister of Finance, they should hold the Minister of Petroleum Resources responsible.”
He said it was this charge that compelled Alison-Maduke to come out a few days later to announce that she had saved N850 billion from the oil sector, adding, “But I quickly retorted that she was not the one who saved it; the credit, instead, should go to the Minister of Finance.
“I should make it clear once and for all that no amount of threats, intimidation or harassment can stop me from speaking out when the situation calls for it. That is the sacrifice I have to make for my country. Once I believe in a cause I stand by it, even if I’m alone.”