21 February 2014

Nigeria: Why NNPC Can't Remit All Revenues - Adoke

The attorney-general of the federation (AGF) and minister of justice, Mohammed Bello Adoke, yesterday told the Senate public hearing that the Nigerian National Petroleum Corporation (NNPC) was not statutorily bound to remit all revenues derived from upstream petroleum operations to the Federation Account.

Adoke also accused the suspended CBN governor, Malam Sanusi Lamido Sanusi, of attempting to subvert the constitutional powers of the AGF.

Adoke appeared before the Senate Committee on Finance, organisers of the hearing to provide legal opinion on some of the issues raised during the investigative hearing on the alleged missing $20million oil funds.

Consequently, he declared that despite the constitutional provisions requiring that all revenues be paid into the Federation Account, NNPC could still deduct its cost of business.

"Thus, it is my considered view that the provision of Section 162 which requires all revenue to be remitted to the Federation Account does not preclude the deduction of NNPC'S expenditure or cost of business.

"This is more so as the federating units do not contribute to the funding of upstream petroleum operations of the NNPC and its subsidiary," he said.

According to him, only the net revenue from upstream petroleum operations of the Nigeria Petroleum Development Company (NPDC) should be paid into the Federation Account by the NNPC.

"In other words, NPDC is required to pay only what amounts to dividend and its crude oil proceeds to the NNPC (as its holding company) and the NNPC will in turn pay that into the Federation Account. Consequently, what the NNPC is required to pay into the Federation Account is the 'net revenue' as opposed to the gross revenue," he said.

The committee directed the CBN to provide a more specific assertion on how much it alleged that NNPC ought to pay to the Federation Account out of the $6 billion it said had been paid to the NPDC.The committee had sought to know the legality of such transfer.

Meanwhile, the NPDC said yesterday that the only money it deducted was what was budgeted for its operations.

NPDC managing director, Victor Briggs, however, promised to provide details of its budget to the committee before the end of this month.

Adoke also said yesterday that the the NNPC could legitimately transfer its participating interest in the Oil Mining Lease to its wholly owned subsidiary, the NPDC.

On alleged attempt by Sanusi to undermine his powers, Adoke said: "The resort by the CBN governor to paid legal opinion from private counsel on the interpretation and application of certain constitutional provisions, the enabling statutes of government wholly owned corporations, regulatory agencies and policies, are not only irregular, but a deliberate attempt to whittle down the powers of the attorney-general of the federation as the chief law officer of the federation as enshrined in Section 150 of the constitution."

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