NEITI Report: Nigerian Senate sets anti-corruption record

The Nigeria National Petroleum Corporation
(NNPC) did not remit $12.9bn to the
federation account between 2005 and 2013,”
Waziri Adio, executive secretary of the Nigeria
Extractive Industry Transparency Initiative
(NEITI), said on Wednesday.
Adio made this revelation before a packed
chamber of the Nigeria senate. The NEITI
boss, who was speaking on the agency’s 2013
audit report of the oil and gas sector, was the
first to be accorded the honour of making a
presentation on such a matter before the
upper legislative chamber in the present
democratic dispensation.
He later expressed the historicity of the
occasion in a series of tweets on his twitter
handle- @waziriadio. “Thanks, Your Excellency
for giving us the rare opportunity to address
@NGRSenate on this very critical national
issue,” Adio said in reference to Senate
President Bukola Saraki “We are grateful for
the opportunity granted by SP @bukolasaraki
and distinguished senators to brief
@NGRSenate today on @nigeriaeiti reports.
“This is historic, being the first time
@nigeriaeiti’s reports will be taken
seriously by NASS. We welcome the
committee set up by @NGRSenate.
“We hope this marks a real turning-
point in fixing the deep gaps in our
extractive sector. Thanks again to
SP@bukolasaraki.”
Indubitably, by its action in adopting the
report and setting up a committee to look into
it, the senate has set a record in the war
against corruption. Among other revelations,
the NEITI boss asserted that Nigeria was only
sure of the amount of crude oil it exports, but
could not say the quantity of the commodity it
produces.
He explained that the lack of accurate
information on the actual quantity of crude oil
Nigeria produces was compounded by the
absence of a proper metering system.
“In 2013, the country produced 800.3
million barrels and out of that the
country made $58.07 bn and that
represents an eight percent reduction
on the $62.9bn that the country made
in 2012,” he said.
“The second issue is that there are
some monies that were withheld, lost
or underpaid for different reasons.
“These monies are in three
tranches.The first is in the category of
the unremitted, and the unremitted
amounted to $3.8bn and N358m.
“The second category is the category of
losses, because of some inefficient
practices and theft among other things,
the country lost $5.9bn and N20bn.
“Under the category of the under-
assessed the country lost $599.8m.
“When we look at the unremitted
$1.7bn is still being owed the federation
for OMLS.
“Also, $1.29bn from the NLNG
dividends and N351bn from unpaid
domestic crude debt, N2.17bn from
cash calls refunds.
“Those are the monies we have
established that should have been paid
to the federation and were not paid.
“The second category of losses by NNPC
and its subsidiaries. Out of the $5.9bn,
N4.7 bn was lost to theft and vandalism.
“N20bn was lost because the NNPC did
not observe the 90 days credit grace
and when you look at the time value of
money, if you calculate at 12 percent
interest the country lost N20bn.
“Some of the issues in the report. The
first is about the assets divested by
NNPC to NPDC. NNPC between 2010
and 2011 divested eight assets that
belong to the federation to its upstream
subsidiary NPDC. So NNPC divested 55
percent of the shares being held on
behalf of the federation to the NPDC.
“These eight OMLS are valued at $1.8bn
by DPR. NPDC paid only $100m out of
the $1.8bn meaning there is an
outstanding of $1.7 bn, and even that
$100m was paid two years after.
“What this means is that NNPC lifted oil
on behalf of NPDC not on behalf the
federation despite the fact that NPDC
has not fully paid for those assets.
“Another issue that came out of the
audit is the NLNG dividend. NLNG in
2013 paid $1.28 bn, but the money was
not remitted to the federation account.
“Beyond this between 2005 and 2013
NLNG paid $12.9bn to NNPC and NNPC
acknowledged receiving it, but the
money was not remitted to the
federation account.
“Another is the losses incurred from
swap and OPA. This is the arrangement
where NNPC exchanges crude for
product and the country lost $518m due
to the inefficiency of the swap and OPA.
“$211m was lost to product swap and
$306m was lost to OPA.
“N1.3trn was posted for petroleum
subsidy in 2013. It was 30 percent
higher than the total for budget
education, health, water and SURE-P.
“We found out that we have
infrastructural deficit- the country can
only say what it exports and cannot say
authoritatively what it produces.
“This has always been an issue and the
audit confirms that we still don’t have
meters where we should have them.
“This lack of metering has serious
implication for revenue and national
security.”
Speaking after the presentation, Saraki
assured Adio that the senate would take
action on the recommendations in the
report.
“I can assure you will discuss this report
fully, and we will take action. We will
task the executive to prosecute those
who are culpable,” he said. The senate
president, thereafter, set up an ad hoc
committee chaired by Jibrin Barau, a
senator from Kano state, to look into
the report.
Saraki directed the committee to turn in
its report in four weeks.

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