Oil
How we spent $10.8bn oil revenue – NNPC
ABUJA – The management of the Nigerian National Petroleum Corporation, NNPC, yesterday, gave a clearer account of how it spent the $10.8 billion, the remaining part of the controversial un-remitted $48.9 billion oil revenue.
The Corporation which said it spent the sum on subsidy on PMS, known as petrol, repairs of vandalised pipeline and products/crude oil losses as well as maintenance of national strategic reserves, said it enjoys legal backing to incur such expenditure on behalf of the government.
The Group Executive Director, Finance and Accounts Directorate of the Corporation, Mr. Bernard Otti, while making the clarification at an interactive session with Energy Correspondents in Abuja, said that as a law-abiding corporate entity, NNPC’s processes and procedures are guided by the provisions of the law.
He said, “whatever expenditure we have incurred in the discharge of the above national responsibilities are backed by the law setting up the Corporation”. He said the Corporation was backed by Section 7, Sub section A and B of the NNPC Act.
Mr. Otti insisted that the $10.8 billion currently the subject of ongoing inter-agency reconciliation exercise was not missing, noting that, “the sum in question has been expenditures incurred as part of statutory responsibilities which the NNPC as a National Oil Company executes on behalf of the Federal Government and by extension the entire people of Nigeria.”
He said the $10.5 billion reflects expenditure incurred by the NNPC in the period under review and are rarely made up of the following, subsidy claims, $8.49 billion, pipeline Management and Repair cost, $1.22 billion, products/crude oil losses, $0.72 billion, and cost of holding Strategic Reserves, $0.37 billion.
He said these are being subject to the normal continuing inter-agency reconciliation exercise. He added, “there is a process by which revenue accrue into government account, there is also government policy stating that subsidy is still in place. NNPC does not create policies but it execute s policies, the subsidy claim has simply arisen because after 2011period. We saw there was no import of petroleum products when prices had gone up, NNPC was the sole importer and subsidy claims for this particular period had gone up. The subsidy claims normally is known to all relevant agencies.”
Mr. Otti who is also a member, Board of Directors of the Corporation added that, “It is also on record that for many years now, NNPC has been the main supplier of products to the nation. Most of these products are imported at international prices but sold at regulated prices.
At some point, NNPC was the sole importer of products into the country. The Corporation has successfully kept the nation wet with products, especially PMS, for the past three years as can be verified from the absence of queues at petrol stations during normal and festive seasons.
“It is significant to note that the government has not made any payments to the Corporation in the name of subsidy during the period under review.
“I should like to use this opportunity to restate our position on subsidy. The subsidy is a policy of the Federal Government. We only implement what we are directed to,” he said.
Otti stressed further that “another area of huge expenditure on behalf of the Federal Government is the maintenance of national strategic reserves for petroleum products. At every point in time round the year, NNPC maintains huge petroleum products reserves on land and in the national territorial waters”
– VANGUARD
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.
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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.
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.
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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