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CBN Bombshell on NNPC turns a fluke

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…CBN Gov. Unable to Prove N50billion Allegation At Joint Meeting

ABUJA – Information  obtained through sources near the center of power in Abuja indicate that the controversial allegation levied by the Central Bank of Nigeria [CBN] Governor, Malam Sanusi Lamido Sanusi on the handlers of the oil proceeds of the federal republic of Nigeria – of having “misplaced N50billion” – may have been made under a guise. A source states that the CBN gov may have spoke out of political concerns and/or political career rather than the concerns of the nation.

This information was made evident following a meeting held between the Central Bank of Nigeria, Nigerian National Petroleum Corporation, the Department of Petroleum Resources, the Federal Inland Revenue Service, the Office of the Accountant General of the Federation, the Budget Office of the Federation, and the Federal Ministries of Finance and Petroleum Resources. The meeting was held to help reconcile the nation’s revenue.

During the meeting, it was found that the CBN governor spoke in error when he told the Nigerian public that Nigeria’s oil revenue managers may have misplaced the sum of N50billion.

A source close to one of the participants of the joint meeting revealed to 247ureports.com that the CBN governor participated fully in the effort to reconcile the discrepancies supposedly highlighted by the allegations levied by the CBN governor. The source pointed out that the CBN seemed determined to prove his allegations – but “he was not fully informed of the data and processes involved”.

Few minutes into the exercise, the source notes – brought Malam Sanusi to the quick realization that he may have spoken without the complete facts. The source revealed that Sanusi – upon realizing his error – offered a silent apology to the affect principal officers.

The source added – “The meetings just held, reconciled $39 billion leaving a shortfall of $10.8 billion. The shortfall is being addressed in present discussions that have being ongoing for months. They have been previously addressed at FAAC and all parties are working hard to resolve the issues“.

Below is a summary of the findings – from the meeting

1. The Central Bank of Nigeria (CBN) recently reported that about USD49.8 billion could not be accounted for from crude oil exports by the NNPC over the period January 2012 to July 2013. The CBN raised this concern in the context of low accretion to the foreign exchange reserves despite sustained high oil prices. This note is the outcome of a reconciliation exercise among the aforementioned stakeholders, held at the Ministry of Finance, to clarify the issues raised by the CBN.

2. According to the CBN, based on data from pre-shipment inspection agents, over the period January 2012 to July 2013, a total of 594.02 million barrels of crude oil were lifted by the NNPC, amounting to about USD65.3 billion. However, the amount remitted into the Federation Account at the CBN amounted to only USD15.53 billion. This prompted the CBN to raise the issue of an observed gap in expected revenues.

3. A revenue reconciliation meeting was therefore convened among the CBN, NNPC, the Federal Ministry of Finance and other stakeholders to clarify the observed sources of discrepancy. At this meeting, the NNPC noted that the actual proceeds from crude oil exports over the period amounted to USD67.12 billion, and was thus about USD1.79 billion higher than the revenues reported by the CBN (possibly due to timing differences and NPDC liftings which were not included in the CBN report).

4. According to the NNPC’s records, the total revenues of USD67.12 billion, was comprised of revenues which directly accrued to NNPC (for the Federation Account) of USD14 billion; and additional revenues lifted by NNPC on behalf of other parties as follows: for FIRS (USD15 billion), for DPR (USD2 billion), for NPDC (USD6 billion) and for other third party financing (USD 2 billion). In addition, domestic crude lifted by the NNPC amounted to about USD28 billion. This domestic crude component was not reflected in the CBN’s foreign accounts, but rather paid directly in Naira into the Federation Account. Taking account of these various exports conducted on behalf of the non-NNPC parties, the total of USD67 billion was mostly accounted for. This substantially addresses the issues raised by the CBN.

5. However, the Federation Account indicates that over the period January 2012 to July 2013, a shortfall of N1.716 trillion was recorded from the domestic crude oil receipts. This shortfall was acknowledged by NNPC, and explained to be the result of subsidy claims, unrecovered crude/product losses, and cost of strategic petroleum storage (which is currently not captured in the PPPRA template for refunds). This figure is also well-known to all stakeholders at the Federation Account Allocation Committee (FAAC), and is reported and updated on a monthly basis.

6. To tackle this shortfall in revenues, the Government has initiated various steps to address these challenges from both security and operational fronts.

7. As a result of the changing structure of the business arrangements – from joint ventures to production sharing contracts, alternative financing arrangements, and the impact of the fiscal regime on gas development – the government take in recent years has been declining. In this regard, a quick passage of the Petroleum Industry Bill (PIB) will help to reverse this trend.

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Oil

FG Introduces New Incentives To Revitalize Nigeria’s Oil & Gas Industry

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In a strategic move to revitalize Nigeria’s oil and gas sector, the Federal Government has unveiled two key fiscal incentives aimed at attracting investment and enhancing energy security.

The announcement was made by Mr. Wale Edun, the Minister of Finance and Coordinating Minister of the Economy on Wednesday.

The first initiative, the Value Added Tax (VAT) Modification Order 2024, introduces critical exemptions for essential energy products and infrastructure, including Diesel, Feed Gas, Liquefied Petroleum Gas (LPG), Compressed Natural Gas (CNG), Electric Vehicles, Liquefied Natural Gas (LNG) infrastructure, and Clean Cooking Equipment.

Read Also: Atiku Calls For Rotational Presidency Across Nigeria’s Geopolitical Zones

These exemptions are designed to reduce living costs for Nigerians, promote energy security, and accelerate the transition to cleaner energy alternatives.

The second initiative, the Notice of Tax Incentives for Deep Offshore Oil & Gas Production, offers new tax relief options for deep offshore exploration projects.

This measure aims to position Nigeria’s deep offshore basin as a premier destination for international oil and gas investments, boosting the country’s appeal to foreign investors.

These reforms are part of a broader set of policy initiatives, known as Policy Directives 40-42, endorsed by President Bola Ahmed Tinubu.

The directives reflect the administration’s commitment to fostering sustainable development in the energy sector and enhancing Nigeria’s competitive edge in the global oil and gas market.

 

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Tinubu set to approve ExxonMobil-Seplat oil deal, expands CNG bus initiative

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By Yemie Adeoye

NIGERIA’s President Bola Tinubu has announced that the protracted ExxonMobil-Seplat upstream oil divestment will be formally approved by the Minister of petroleum within a matter of days, just as he announced his government’s intention to expand the Compress natural Gas, CNG buses initiative.

The President who stated this during his Independence day nationwide broadcast stated that the move is in line with his administration’s commitment to free enterprise, free entry and free exit in investments which is the hallmark of his administration investment policy.

“Fellow compatriots, our administration is committed to free enterprise, free entry, and free exit in investments while maintaining the sanctity and efficacy of our regulatory processes. This principle guides the divestment transactions in our upstream petroleum sector, where we are committed to changing the fortune positively. As such, the ExxonMobil Seplat divestment will receive ministerial approval in a matter of days, having been concluded by the regulator, NUPRC, in line with the Petroleum Industry Act, PIA. This was done in the same manner as other qualified divestments approved in the sector.”

The President also seized the opportunity to plead with Nigerians to be patient with his administration’s reform policies. “As your President, I assure you that we are committed to finding sustainable solutions to alleviate the suffering of our citizens. Once again, I plead for your patience as the reforms we are implementing show positive signs, and we are beginning to see light at the end of the tunnel”.

“Our energy transition programme is on course. We are expanding the adoption of the Presidential Initiative on Compressed Natural Gas for mass transit with private sector players. The Federal Government is ready to assist the thirty-six States and FCT in acquiring CNG buses for cheaper public transportation.

Fellow Nigerians, while we are working to stabilise the economy and secure the country, we also seek to foster national unity and build social harmony and cohesion. Our economy can only thrive when there is peace”. he enthused.

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ExxonMobil To Invest $10bn In Nigeria’s Deep-Water Oil Operations

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As part of the administration’s push to improve Ease of Doing Business (EoDB), Nigeria’s Vice President Kashim Shettima has expressed support for ExxonMobil’s plan to invest $10 billion in the country’s deep-water oil sector.

Speaking on Wednesday, September 25, 2024, during a meeting with ExxonMobil executives at the 79th United Nations General Assembly (UNGA) in New York, Shettima called the investment “a clear testament to the administration’s economic reforms and investor-friendly policies.”

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This announcement follows news that international maritime company DP World intends to develop a multibillion-dollar port project in Nigeria.

Stanley Nkwocha, Senior Special Assistant to the President on Media and Communications, shared the development in a statement on Wednesday. He quoted Shettima as saying: “ExxonMobil’s potential investment aligns with the vision of President Bola Ahmed Tinubu’s administration for a more investment-friendly Nigeria.

We are committed to fostering an environment that supports such transformative projects.”Shettima also discussed the administration’s broader efforts to improve the ease of doing business, highlighting the “Renewed Hope Agenda,” which aims to simplify bureaucratic processes, enhance transparency, and offer fiscal incentives to attract global investors.

“Our administration has taken bold steps to unify the exchange rate, remove fuel subsidies, and implement tax reforms. These measures, though challenging in the short term, are intended to create a stable and predictable business environment in the long term,” he added.

On the oil and gas sector, Shettima mentioned that the government is revising the fiscal framework for deep-water operations to attract investment while ensuring fair returns for the Nigerian people.

 

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