Senate Accuses NNPC, NPDC of Failing to Remit $3.487bn to Federation Account

• Orders immediate remittance, constitutes c’ttee to probe corporation

The Senate tuesday accused the Nigeria National Petroleum Corporation (NNPC) and its exploration and production subsidiary, Nigerian Petroleum Development Company (NPDC), of willful misappropriation and for criminally withholding public revenue to the tune of $3.487 billion.

It also accused NPDC of lifting crude from divested oil wells – Oil Mining Leases (OML) 65, 111 and 119 – to the tune of $1.847 billion, of which it paid a paltry $100 million to the Federation Account.

The Senate equally said that the non-remittance of proceeds from the sale of crude oil started before the advent of this administration and had continued under the current administration unabated.

It said the acts were perpetrated with impunity to the extent that between January and August this year alone, NPDC allegedly lifted crude amounting to $344.442 million without following due process.

Moving a motion through a point of order yesterday, Senator Dino Melaye (Kogi West), who said it was worrisome that the two agencies had been lifting crude oil without recourse to transparency, added that NPDC had since 2013 been lifting crude from divested oil wells OML 61, 62 and 63 to the tune of $3.487 billion without remitting it to the Federation Account.

He also accused NPDC of failing to pay royalties and other taxes.
The Senate therefore mandated the NNPC and the NPDC to immediately remit monies obtained on behalf of the federal government to the Federation Account and also tasked the Group Managing Director of NNPC, Baru Maikanti, to ensure compliance with this directive with immediate effect.

It also tasked the NNPC “to as a matter of urgency forward to the National Assembly its yearly estimate for repairs and pipeline operations and maintenance for appropriation”.

Concerned about the continuing practice of withholding part of crude oil sale proceeds by NNPC for use in pipeline repairs and product losses, Melaye said: “It is curious that despite the much trumpeted anti-corruption stance of the current administration that this level of corruption could still be nestled and tucked in by highly placed individuals is derisive of the entire anti-corruption fight.

“The Senate observes that the said amount so far withheld illegally can build about 11 world-class teaching hospitals, fully equipped to cutting edge machinery of about 200 beds in Nigeria, six health care centres in each of the 774 local government areas of the country, and added on the national power grid 4,000MW of electricity.
“The Senate further observes that this amount, if remitted into the Federation Account, would have had an immediate and significant impact on the economy by bringing down the cost of the naira instantly and boosting the federation reserves appreciably.”

Melaye insisted that the amount allegedly being withheld from the Federation Account could address “the needs of internally displaced persons (IDPs) in the North-east 9.9 times over”.

He also said the total amount the agencies had so far withheld exceeded the joint venture cash calls value for the year 2016, adding that the figure was more than government’s disposable investment plan in 2016.

Supporting the motion, Senator Mao Ohuanbunwa described the acts of the two agencies as nothing but an infringement on the 1999 Constitution, which he said provides that funds generated by such agencies must be paid into the Consolidated Revenue Fund (CRF) account.

According to him, keeping such a huge amount of money in private pockets at such a time when Nigeria is experiencing a recession and with prevalent poverty is unacceptable.

He appealed to his colleagues to ensure that the matter was taken very seriously.
Also contributing to the motion, Senator Adeola Olamilekan (Lagos West) lamented the degree of misappropriation of revenues by the agencies, adding that the allegation was factual.

Olamilekan further said depriving the nation of the whooping sum of almost $4 billion by the two agencies at the time government was seeking to borrow $30 billion must not go unpunished.

The matter was referred to the Joint Senate Committee on Petroleum (Upstream, Downstream) and Finance for investigation. The committee is expected to report its findings to the Senate on January 9.