Leadership (Abuja)

Nigeria: Missing Oil Money U.S.$12 Billion Not U.S.$49.8 Billion - Sanusi

Photo: Vanguard
Oil thief cartoon.

Contrary to the earlier alarm raised, the governor of the Central Bank of Nigeria (CBN), Sanusi Lamido Sanusi has clarified that the amount for crude oil revenue not accounted for by the Nigerian National Petroleum Corporation (NNPC) is now $12billion and not $49.8billion.

Sanusi stated this yesterday in Abuja, during a joint briefing by the minister of finance, Dr Ngozi Okonjo-Iweala, minister of petroleum resources, Mrs Diezani Alison-Madueke and himself, at the Finance Headquarters.

This is even as the minister of finance, Dr Okonjo-Iweala said the shortfall they are reconciling with the NNPC is $10.8bn and not $12bn, as claimed by Sanusi.

She said that in the course of the reconciliation from January 2012 to July 2013, "we have looked at a shortfall of about N1.7trillion, the equivalent of $10.8bn. That is the amount that we have been discussing and of course NNPC has been disputing some of it." Sanusi said that from the reconciliations of the last two days, it was discovered that out of the total crude oil of $65bn shipped within the period, $24bn did not belong to the NNPC. Rather, it was crude that was paid by oil companies as tax and royalties.

"What we had in our records was $65bn shipped by NNPC and about $15bn was returned as equity to the federation account. After the letter, the president asked for these meetings and we have discovered the following: That out of the $50bn left, $24bn did not belong to NNPC. It was crude that was paid by oil companies as tax and royalties and shipment for them from NPDC and so on. So that explains half of the sum.

"Now where the outstanding issues are is with the $28bn domestic crude, which has been taken by NNPC.

From out records, we have received $16bn; there is a shortfall of $12bn and we are told that that shortfall has always been a part of an ongoing discussion with Finance and Petroleum and NNPC. So this is where we are. Finance, NNPC, all parties are going to try to resolve this matter," Sanusi declared.

Speaking earlier, Okonjo-Iweala, conceded that there were shortfalls in oil remittances from the NNPC, on which there was ongoing reconciliation through the Federation Account Allocation Committee (FAAC) committee.

She, however, said there were some misconceptions or misunderstandings that led to the sum $49.8bn and that "we have been able to come to the conclusion that we can account for this amount."

She said that prior to talking to the media, staff members from the Ministry of Petroleum Resources and NNPC, from the Ministry of Finance and the CBN had spent two days working and reconciling figures so that they could get answers to the questions that have been asked.

"We have been able to get to the bottom of the $49.8bn that was indicated in the CBN memo. But also due to the way that the accounting for the crude was read, some of it that was being lifted for other parties to the tune of $24bn was said to be missing, but it has been accounted for.

So the bulk of the sum of $49bn has been accounted for and that is what the reconciliation exercise is about. So it is very clear that this is not missing."

The finance minister said that according to the NNPC records, the total revenue of US$67.12bn comprised revenues that directly accrued to NNPC (for the Federation Account) of US$14bn and additional revenues lifted by NNPC on behalf of other parties as follows: For FIRS, US$15bn; for DPR, US$2bn; for NPDC US$6bn, and for other third party financing, US$2bn. In addition, domestic crude lifted by the NNPC amounted to about US$28bn.

This domestic crude component, she explained, was not reflected in the CBN's foreign accounts, but rather paid directly in Naira into the Federation Account.

"Taking account of these various exports conducted on behalf of the non-NNPC parties, the total of US$67bn was mostly accounted for. This substantially addresses the issues raised by the CBN," she said.

"But it is an ongoing reconciliation. We will still continue; we do it every month.

We will continue our work after now until we can come to terms of what is actually the shortfall and what is due to come to the Federation Account," Okonjo-Iweala further said.

Minister of Petroleum Resources Alison-Madueke, in her remarks also agreed that there were shortfalls in remittances from the NNPC and that they had held very robust reconciliation meetings over the last couple of days to determine how it was not accounted for.

She, however, stressed that attention must be given to the issue of crude oil theft.

"Let me add quickly that while there are concerns about revenue shortfalls issues and so on, the actual base product that produces this revenue for us, which is crude production, has actually been under a lot of scourge to do with crude oil theft for quite some time.

And it is critical to mention that there have been very aggressive ongoing efforts to increase our production volume and mitigate and minimise this incidence of crude theft, since it is the crude that gives us physical returns in the first place.

"I think it is important to note that those efforts have been quite widespread. They include our invitation to the United States to partner and assist us in this, particularly the international dimensions of this crude theft.

We are in ongoing discussions with them. We met with a cross-sectional team of intelligence experts last week and we had very crucial discussions that cut across many areas of the business.

"We have already over the last two weeks seen an increase from a drop in 2.20 million bpd to what is today 2.38 million bpd and if we can keep up this level of aggression, we should see it sustained and hopefully increased.

Let me also add that the Ministry of Petroleum Resources and NNPC have always participated in the curtailment and reconciliation meetings along with other stakeholders and that will continue and will hopefully get even more aggressive.

The expectation of course is to ensure that the full benefit of oil is received and sustained for the benefit of all Nigerians," she said.

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Nigerian Governor Backtracks on Missing Oil Revenue

Oil thief cartoon.

Governor of the Central Bank, Sanusi Lamido Sanusi, has reversed his claim that over U.S.$49 billion proceeds of oil sales was missing from the Federation Account. Read more »