NNPC finally releases statement on Diezani

By Amako Nneji March 17, 2016 12:09

NNPC finally releases statement on Diezani

The Nigerian National Petroleum Corporation, NNPC, has on Wednesday, March 16, finally reacted to the report submitted by the Auditor-General of the Federation, Samuel Ukura, to the National Assembly, indicting the corporation, over the non-remittance of N3.2 trillion to the Federation Account as at December 31, 2014.

Diezani-Alison Madueke was the Minister of Petroleum and Natural Resources as at December 31, 2014.

The Group Executive Director/Chief Financial Officer (Finance & Accounts) of NNPC, Isiaka Abdulrazaq, described the Auditor-General’s report as erroneous and misleading.

The Auditor-General had recently spilled the bean that the NNPC did not remit N3.2 trillion to the Federation Account Allocation Committee in 2014.

This allegation was contained in the 2014 Annual Audit Report presented to the National Assembly last Monday.

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Abdulrazaq, while exonerating the former minister (Diezani) and the NNPC from any wrong doing said, “The declaration by the AGF may have been borne out of misunderstanding of how revenues from crude oil and gas sales are remitted into the Federation Account,” he noted.

He added that, although NNPC usually gets allocation of 445,000 barrels per day for processing into petroleum products for distribution to the nation, any unprocessed crude was sold and the proceeds used to pay for fuel importation.

“The proceeds from the sale of these products are remitted to the federation account after deducting the cost associated with the supply and distribution,” he said.

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As a major supplier of petroleum products, he said the NNPC was entitled to claims on subsidy from petroleum products sold at government regulated price.

Abdulrazaq further said, between January 2012 and December 2014, total subsidy approved for NNPC and certified by Petroleum Products Pricing Regulatory Agency, PPPRA, was about N2.34 trillion, apart from additional N7.96 billion claims still under reconciliation.

During the same period, he said losses from vandalism of crude oil pipelines and petroleum products stood at about N202.68 billion, while petroleum products strategic holding cost and pipeline repairs and maintenance cost for the period gulped a whooping N358.88 billion.

Consequently, he said the total figure the NNPC owed the Federation Account as at January 2015 Federation Account Allocation Committee, FAAC, meeting report was only N326.14 billion, which he said was still being reconciled, and not the N3.23 trillion alleged by the AGF.

He said NNPC’s claims of N1.38 trillion pending against the Federation as at 2009 was currently being reviewed by Forensic Auditors appointed by the former Minister of Finance, Ngozi Okonjo-Iweala.

“It is clear that the AGF failed to reflect all the figures as they should be, not minding the fact that there is a clear process in conducting FAAC meetings where all Federation revenues are presented, discussed and approved.

“There are series of meetings before and after FAAC meetings to reconcile and resolve any issue as the need may arise.” Abdulrazaq said.

He denied knowledge about another $235 million allegedly transferred to undisclosed Escrow Account from the sale of natural gas, saying, “NNPC does not have any secret Escrow Accounts”.

The $235 million, the NNPC Financial Controller explained, represented proceeds from the sale of gas feed stock to Nigerian Liquefied Natural Gas Limited, NLNG, used to repay part of the Modified Carry Agreement, MCA, loans, applicable royalty to the Department of Petroleum Resources, DPR, and tax to the Federal Inland Revenue Service, FIRS.

Abdulrazaq, accused the AGF of ignoring global best practice and established due process in auditing, by refusing to convene an exit meeting between the auditor and the auditee where any outstanding issues were finally discussed and explained before the issuance of the audit report.

“There was no such meeting, and NNPC did not receive any draft report from the AGF’s office for comments,” Abdulrazaq argued.

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See attached document…