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Reps Probe: NNPC withholds $5.4bn NLNG fund
ABUJA — THE House of Representatives ad-hoc committee investigating the
activities of the Nigerian National Petroleum Corporation (NNPC), its
subsidiaries and the Department of Petroleum Resources (DPR) from 1999 to
date, yesterday said the NNPC has not remitted $5.4 billion which is
Nigeria’s profit in the Nigeria Liquefied Natural Gas (NLNG) venture into
the federation account as stipulated by law.
The Committee said that the Accountant-General of the Federation has written
it to say that only $127 million of the profit has been remitted to the
Federal Government account, with the balance unaccounted for.
But the NNPC, in a swift reaction, said it grossed a profit of only $4.43
billion from its share of the investment, saying the entire proceeds have
been ploughed back into expanding the business.
Also, the House of Representatives accused the NNPC of officially allocating
Low Pour Fuel Oil (LPFO), meant for the consumption of Nigerian industries
to three companies who exported them and made exorbitant profits, while
Nigerian industries suffered closure as a result. This claim could not be
disputed by the NNPC.
In the same vein, the ad-hoc committee alleged that the Hart Group of London
and Akintola Williams accounting firms, which audited the oil industries
from 1999 to 2007, covered up the NNPC and its subsidiaries in shady deals
valued at over $4.63 billion between 2003 and 2007, saying the firms
involved must appear to defend themselves before the committee.
The ad-hoc committee of the House of Representatives is co-chaired by Reps.
Igo Agoma, Bassey Otu, Leo Ogor, Clever Ikisikpo and Halims Agoda. Other
members of the committee are Reps Abike Dabiri, Umar Bature, and Yusus
Maitama Tuggar.
$5.4 billion NLNG proceeds squandered
The investigation which entered its second day yesterday was chaired by Rep.
Igo Aguma, who called the attention of representatives of the NNPC to the
NLNG issue.
“We have it on record”, he said, “that the Federation Account has received
only $127 million as dividend in the Federal Government activities in the
NLNG.
We have documents from the office of the Accountant-General of the
Federation claiming that is the only amount the Federal Government has
received from its huge investment ever since.
We also have documents interestingly, from you, the NNPC, indicating that
you have received profits or dividend amounting to close to $5 billion from
the NLNG. We are talking of something around $5.4 billion.
“What we want to know now is where is the balance of the money?”
In response, the Group Executive Director, Finance and Administration of the
NNPC, Mr. Abiodun Arogundade, protested that: “The total dividend that we
received from the NLNG is not close to $5 billion. We actually received
$4.43 billion.
Aguma: So where is the money?
Arogundade: We have re-invested it in all the other NLNG projects.
Aguma: Are you are aware that the law of the land says that “all revenue
accruing to the Federal Government must be paid into the consolidated
Revenue Account”?
Arogundade: Yes, I am aware, and the NNPC, as a responsible corporate
citizen, is aware.
Aguma: Good! And that money, is not meant for only the Federal Government
alone, but all the tiers of government. So where is the money?
Arogundade: Sir, we would give you all the details of the amount we received
and the approvals we got to spend them.
Asked who gave the NNPC the authority to spend money not appropriated by an
Act of the National Assembly, he had no answer.
Aguma: Is it true that the money is in the United States of America?
Arogundade: No sir, it is in Nigerian Banks. We would give you the details
sir.
In his response, the former Group Managing Director (GMD) of the NNPC,
Abubakar Yar’Adua said that the money was used in a manner that would make
the country proud.
“We used the money for Train 6”, he said, “and now we are building Train 7.
Where do you think the money is coming from?” He asked.
But the committee was resolute in condemning the NNPC, saying it has never
brought its budget to the National Assembly for appropriation, and spends
public money the way it deems fit in a manner far from being transparent.
The committee warned that touching any money belonging to the Federal
Government without constitutional authority could send somebody to jail.
On LPFO
Fielding questions from the ad-hoc committee, the Managing Director (MD) of
the Pipelines & Products Marketing Company, Mr. Stanley Reginald, admitted
that LPFO is produced solely for local Nigerian industries. He however
admitted that at the time he came into office as MD, there was no due
process in allocating the product.
He said that LPFO is highly subsidized so that local industries can run.
According to Reginald, the maximum allocation is about 50,000 metric tones
to any company, such as Cement and Sugar companies running in Nigeria.
But, the committee showed him, from PPMC records, how the PPMC allocated
LPFO to several companies officially for export, while many companies in the
country had to shut down as a result of being starved of LPFO.
Some of the companies, the committee alleged, were not even registered as
limited liability companies.
The companies in the Committee’s records are Ocean and Oil, which allegedly
lifted for export 200,000 metric tones of LPFO between 2000-2001; Nuel
Energy, 100,000 metric tones; Haske Oil, 50,000 metric tones; while Messrs
MIRS S & Gas lifted and exported a total 908,000 metric tones.
The Committee also found that the “NNPC imported 5.09 metric tones of fuel,
but registered 7.13 metric tones, and collected $551million from the Federal
Government.”
The Committee also discovered to its chagrin that “the NNPC diverted Joint
Venture Cash calls in the year 2000 to the tune of $650million outside this
country to invest and after two years, the interest accrued from that money
was $130million”.
Hon. Agoda continued: “I want this Committee to invite these organizations —
NEITI and Akintola Williams & Company. They should be invited for
explanations of certain findings by this committee. They should come and
explain why they conspired between 2002-2004, with NEITI to conceal the
diversion of the federation crude revenue totaling $3.6billion, between
2002, 2003 and 2004. We have records.
“Two: They should also be invited to explain why they conspired with NEITI
to conceal an alleged fraud of N351billion ($2.27 billion) that was supposed
to have accrued to the federation account. We have the records.
“We have it on record”, he said, “that the Federation Account has received
only $127 million as dividend in the Federal Government activities in the
NLNG.
“We have it on record”, he said, “that the Federation Account has received
only $127 million as dividend in the Federal Government activities in the
NLNG.
“Three: They would also explain why they conspired with the NEITI to conceal
an alleged monumental fraud in petroleum products importation.
“They should explain to us why they conspired with the NEITI to conceal this
monumental fraud, when part of its mandate in the oil and gas industry in
Nigeria, between 1999 and 2004, was to tell Nigerians and indeed, the world
at large, whether the transactions with petroleum products within this
period, were transparent, but they chose to conceal same.
“My advice to the Chairman and my distinguished colleagues, is that these
Companies must appear before this Committee to tell us why these
concealments. They should tell us whether the transactions in petroleum
products where transparent or not.”
No official of NEITI and Akintola Williams accounting firm was on hand to
respond.
