Guardian

•Recovers $1.99b debt from IOCs

THE Nigeria Extractive Industries Transparency Initiatives (NEITI) has recovered that about $1.99 billion (N316 billion) from International Oil Companies (IOCs) and paid into the Federation Account since its inception as an agency of the Federal Government.

The recovery was however, a shortfall from about $9.6 billion being owed the Federal Government by IOCs operating in the nation’s oil and gas sector, for under payments, under assessment and variances in royalties, signature bonuses, levies and taxes over 10 years period (1999-2008).

Executive Secretary, NEITI, Mrs. Zainab Shamsuna Ahmed, who made this revelation at the Institute of Directors Nigeria's (IoD) May members’ evening meeting in Lagos, over the weekend, said the supervisory agency would make sure that corruption and abuse of corporate governance give way to best practices in the nation’s business environment, especially in the oil and gas sector, in all ramifications.

Breakdown of the figures showed that $1 billion was recovered between 1999 and 2004, $550 million (2005) from the IOCs as underpayments and $447 million (2006-2008) as additional assessments on PPT respectively.

According to her, the nation’s oil and gas monitoring agency has begun the process of recovering the $9.6 billion outstanding debts owing the Federal Government by the IOCs, as part of the shortfall of not remitting the actual proceeds from the crude oil sale.

The Executive Secretary explained that for Nigeria to achieve global best practices and corporate governance, especially in the oil and gas sector, the Federal Government must ensure that it tightens the loopholes in the sector like poor record keeping and other leakages in the system.

Ahmed, while pointing out the various steps taken by her agency to bring sanity, corporate governance and best practices in the oil and gas sector, said that $1.73 billion for non-call items was financed from the Central Bank of Nigeria (CBN)/ Nigerian National Petroleum Corporation (NNPC) JP Morgan Chase cash call dollar account.

According to her, such practice should be discouraged in all ramifications, observing that NNPC should apply funds meant for cash calls strictly for Joint Venture (JV) cash call operations.

She pointed out that there have been several delays by companies in preparing and returning templates from entities such as DPR, FIRS, NDDC, NPDC, Pillar Oil and Pan Ocean Oil, admitting that several of the templates returned were either incomplete or wrongly classified.

She however said NEITI is expediting the implementation of the information technology portal that would address the systemic data gathering mechanism and information sharing between the covered entities and government agencies.

Reacting on the subsidy claims, the NEITI boss said about N1.4 trillion was deducted directly from domestic crude oil proceeds as subsidy claims by NNPC before remitting the balance to the Federation Account. Thus, calling on the Federal Government, as a matter of national call, to review the deduction of subsidy claims from the proceeds of domestic crude by NNPC to align them with due process like other marketers who draw their subsidy claims from the Petroleum Support Fund.

Also, she explained that NDDC and TET Fund received $3.2 billion between 2009-2011 and $2.5 billion in 2006-2008.

The flows, according to her, to NDDC are directly made to the agency whilst that of the TET Fund is paid to a designated in the Office of the Accountant General of the Federation (OAGF) as stipulated by the enabling act.

She however recommended that all revenues accruing to the Federation should be treated in accordance with the constitution and subject to the provisions of Appropriation Act.

On CBN unidentified collections, Ahmed said that CBN reported $10.6 billion on a separate template for the PPT collections between 2009 and unidentified oil companies.

According to her, to resolve this, the CBN, FIRS and OAGF have been directed to meet and reconcile these payments, adding that to avoid recurrence, regular reconciliation should be carried out within the year of transaction.