The Nigeria Extractive Industries Transparency Initiative, NEITI, yesterday disclosed that the Nigerian National Petroleum Corporation, NNPC, and its subsidiary, Nigerian Petroleum Development Company, NPDC, and other oil and gas companies are yet to remit a total of $22.06 billion and N481.75 billion to the Federation Account.
According to NEITI, the amount is part of the un-reconciled difference of its audited accounts of the companies for the year 2013 and 2014.
These figures were released at a national conference on remedial issues with the theme, “Resolving Remedial Issues In The NEITI Industry Audit Reports”, held in Abuja.
A breakdown of the figures shows that NNPC is yet to remit the sums of $19.04 billion and N424.57 billion, NPDC has not remitted $2.38 billion and N51.95 billion.
Others that are yet to remit include oil and gas producing companies, $152.69 million and N5.2 billion, and companies involved in offshore processing contracts, $498.6 million.
According to NEITI, the total losses to the federation arising from crude oil production, processing and transportation amounted to $3.038 billion and N60.997 billion.
In addition, NEITI said the un-reconciled difference arising from the allocation, sale and remittance of the proceeds from domestic crude allocated to NNPC during the period amount to N317.475 billion.
In his welcome address, the Executive Secretary of NEITI, Mr Waziri Adio, said the conference was put together as part of efforts to try to resolve the contentious issues usually raised by its audit team.
He stated that the industry audits are usually carried out to ensure that citizens get the best value from the country’s natural resource.
Adio noted that merely having an audit report is not enough, stressing that the only way the report can transit to creating value for the citizens is when identified gaps in the audit are reconciled and remissions made where necessary.
Speaking on how the NEITI audit has help reconcile identified gap, he said the NEITI audit for 2014 showed that domestic crude oil value at N2.44 trillion was unaccounted for.
He stated that with the advocacy initiative and reconciliation efforts of the agency, NNPC remitted the sum of N1.36 trillion into the federation account.
He said the balance of the outstanding, according to NNPC, was used to offset products subsidy, pipeline repair and crude and product losses.
Adio however noted that such practice is in violation of the constitutional provision that all revenues should be remitted to the federation account, adding that it also amounts to spending money outside National Assembly appropriations.
On his part, NNPC’s Managing Director, Capital, Mr Godwin Okonkwo, noted that most of the figures branded by NEITI has been reconciled during previous meetings with teams from the agency.
Meanwhile, oil prices on Monday slipped further as sentiment remained cautious after a plunge in financial markets last week triggered worries that global growth may be slowing.
Brent crude oil futures were at $77.56 a barrel losing six cents from their last close, while the U.S. West Texas Intermediate, WTI, crude futures were at $67.59 a barrel, flat from their last settlement. Sentiment among investors remained cautious after hefty losses last week.
Benjamin Lu of brokerage Phillip Futures in Singapore said Cooling economic conditions and symptoms of softer international trade have exacerbated bearish conditions as (the) growth outlook dims. Singapore-based ship tanker brokerage Eastport said stock prices were falling amid policy uncertainty, rising interest rates and disappointing earnings from some companies.
Financial market turmoil may “weigh on investment and consumer spending, reducing trade flows and ultimately hitting demand,” it said. Hedge funds slashed their bullish wagers on U.S. crude in the latest week to the lowest level in more than a year, the U.S. Commodity Futures Trading Commission said on Friday.
The speculator group cut its combined futures and options position in New York and London by 42,644 contracts to 216,733 in the week to Oct. 23, the lowest level since September 2017.
There were also signs of a slowdown in global trade, with rates for dry-bulk and container ships – which carry most raw materials and manufactured goods – coming under pressure.
On the supply side, however, oil markets remain tense ahead of looming U.S. sanctions against Iran’s crude exports, which are set to start next week and are expected to tighten supply, especially to Asia which takes most of Iran’s shipments.
The tight market in Asia is visible in the low amount of unsold crude oil stored on tankers on waters around Singapore and southern Malaysia, the region’s main oil trading and storage hub. Just four stationary supertankers are currently filled with crude oil, according to Refinitiv Eikon ship tracking data.
That’s down from around 15 a year ago, and from 40 in mid-2016 during the peak of the supply glut. In North America, however, there is no oil shortage as U.S. crude oil production has increased by almost a third since mid-2016 to around 11 million barrels per day.
Production is set to rise further. U.S. drillers added two oilrigs in the week to October 26, bringing the total count to 875, the highest level since March 2015, Baker Hughes energy services firm said on Friday. More than half of all U.S. oilrigs are in the Permian basin in West Texas and eastern New Mexico, the country’s biggest shale oil formation.