The Nigerian National Petroleum Company Limited (NNPC Ltd.), has assured of its readiness to continue to collaborate with the Nigeria Extractive Industries Transparency Initiative (NEITI), and all relevant stakeholders to reconcile its level of indebtedness to the Federation Account.
The review is in line with the Reconciliation Committee set up by President Bola Tinubu to investigate, review and reconcile the financial records on alleged indebtedness to the Federation by both NNPC Ltd. and the Federation Accounts Allocation Committee, FAAC.
A statement yesterday by the Chief Corporate Communications Officer NNPC Ltd., Olufemi Soneye, said the decision comes on the heels of calls by a non-governmental organisation for a probe of several monies allegedly owed to the Federation by the national oil company.
The statement reads further: “NNPC Ltd. states that the claims by the NGO were baseless, considering the fact that NEITI itself had dismissed many of the allegations in the said 2021 report, following a series of engagements with NNPC Ltd.
“NNPC Ltd. states that at the outset of President Bola Ahmed Tinubu’s administration, it was made to sell Premium Motor Spirit (PMS) imported into the country at one-third of its value, a development that gave rise to an average of N400 billion monthly subsidy bill, which subsequently put a strain on its revenues and finances.
“NNPC Ltd. further states that the subsidy bill accumulated up to N3.736 trillion as of May 31st, 2023.”
While the Federation owed NNPC Ltd. the sum of N4.207 trillion as net indebtedness, the Company was only indebted to the Federation in the sum of N2.852 trillion, made up mainly of outstanding Good and Valuable Consideration (GVC) in respect of government upstream divestments, royalties, and Petroleum Profit taxes (PPT).
Regarding gas-to-power debts, Soneye explained that the non-payment of NNPC Ltd.’s share of upstream joint venture gas supplied to the government-owned plants led to the accumulation of indebtedness of N174.07 billion by the Federation.
“Similarly, the receivables due from the federation to NNPC Exploration & Production Limited (NEPL) as of 31st May 2023 amounted to $712 million (equivalent to N309.07 billion at N434.08/US$1) for revenues not remitted to NEPL but paid into the Federation Account.
“While the Federation owed NNPC Ltd. the sum of N4.207 trillion as net indebtedness, the Company was only indebted to the Federation in the sum of N2.852 trillion, made up mainly of outstanding Good and Valuable Consideration (GVC) in respect of government upstream divestments, royalties, and Petroleum Profit taxes (PPT),” he said.
Reiterating its “relationship with NEITI has been very cordial,” NNPC noted that this was “seen in August 2020, when we became an EITI supporting company, joining a group of over 65 extractive companies, state-owned enterprises (SOEs), commodity traders, financial institutions and industry partners committed to observing the EITI’s supporting company expectations.
“Indeed, aside from being a signatory to several of EITI’s global ethics and standards, NNPC Ltd., on the sidelines of the United Nations General Assembly (UNGA) in New York in September this year, signed up to the UN Global Compact on human rights, labour, environment, and anti-corruption, thereby becoming the first state-owned oil company to join the global initiative.”
It concluded that “NNPC Ltd.’s book remains open to all our stakeholders as we remain committed to delivering value to Nigerians with integrity, as espoused in our principles of Transparency, Accountability and Performance Excellence (TAPE), the bulwark of the Mele Kyari leadership of the company.”
