FG Loses $2.27bn to Offshore Processing Arrangement – NEITI

The Nigeria Extractive Industries Transparency Initiative (NEITI} says Nigeria lost N60.99 billion 2.27 billion  dollars and  to the Offshore Processing Arrangement (OPA) and crude for product swap arrangement, valuation issues, crude oil and petroleum products losses.

NEITI stated this, in its ‎2015 Oil and Gas Industry Audit, released Friday in Abuja.

It said that a net loss of 723 million dollars was recorded through the Offshore Processing Arrangement, meaning that the value of refined products that the country received through OPA was less than the value of the crude given by 723 million dollars, even after allowances had been made for costs and margins. “The President Muhammadu Buhari administration cancelled the OPA in November 2015 for being uneconomical. However, there was an outstanding liability of 498 million dollars by companies contracted under OPA from under-delivery of imported products.” It said

The report also noted that 90 million dollars was lost through a practice where NNPC used a revised/lower pricing option at the point of payment instead of the higher price at the point of purchase.

It recommended that non-cash call expenses should be paid from NNPC overhead budget, while payment to NIA and others from cash call account should be discontinued.

‎In addition, the report disclosed that Nigeria’s oil and gas revenues plunged from 54.5 billion dollars  in 2014 to 24.8 billion dollars in 2015, while the country’s oil production fell from 798 million barrels in 2014 to 776 million barrels in 2015.

It also stated that Nigeria suffered a 54.6 per cent decline in oil revenues but only a slight 2.7  per cent fall in oil production, blaming this on the drastic reduction in the unit price of crude oil in the global market.

Furthermore, the report said ‎the Nigerian National Petroleum (NNPC), its downstream subsidiary, the Nigerian Petroleum Development Company (NPDC) and other oil companies of failed to remit 3.78 billion dollars  and N80.64 billion to the Federation Account.

It said that the amount was for unpaid taxes, unremitted dividends of the Nigerian Liquefied Natural Gas Company, NLNG, unpaid liabilities from the controversial OPA, outstanding liabilities with respect to oil and gas royalties and unremitted pipeline transportation fees, among others in 2015.

Specifically, the report disclosed that the NNPC failed to remit 1.07 billion dollars ‎, being NLNG 2015 dividend paid to it; N418.99 million, being outstanding domestic crude oil liability as at December 31, 2015; 16.48 million dollars and N1.6 billion, being the amount yet to be remitted by the NNPC to the Federation Account for pipeline transportation fee paid by the international oil companies, IOC.

‎The report also disclosed that outstanding liabilities of 1.58 billion dollars and N78.2 billion were recorded against the NPDC, in respect of payments for Pay As You Earn, PAYE, Withholding Tax, WHT, Value Added Tax, VAT, Petroleum Profit Tax, PPT, royalty oil, royalty gas, levies and gas flared penalty.

In addition, the report noted that various oil and gas companies were yet to remit a total of 1.11 billion dollars and N428.319 million, being unpaid liability in respect of Royalty Gas and Royalty oil,.

This, it said was unpaid liability in respect of Nigerian Content Development Monitoring Board, NCDMB and the Niger Delta Development Commission ‘s, NDDC, levies, ‎unpaid liabilities in respect of NESS Fee‎ and Petroleum Profit Tax, PPT.

Commenting on the report, Executive Secretary of NEITI, ‎Mr. Waziri Adio, ‎said, “Beyond providing a snapshot of what transpired in 2015, this report reveals money to be recovered, leakages to be blocked, and urgent reforms to be undertaken.

“The most critical take-away is the need to expedite, expand and sustain reforms in this still critical sector of national life.”

(NAN)