The Nigeria Extractive Industries Transparency Initiative (NEITI) on Wednesday urged the Senate to ensure the prompt settlement of $4.977 billion liability by the Nigeria Petroleum Development Company (NPDC).
NEITI also asked the Senate to prevail on NPDC to settle another N68.2 billion liability.
This is contained in a document by the Executive Secretary NEITI, Waziri Adio, presented at an investigative hearing organised by the Senate Joint Committee on Petroleum (Downstream and Upstream) on alleged unlawful mismanagement and withholding of Nigeria National Petroleum Corporation (NNPC) funds from 2013 to date.
In its recommendations, NEITI sought the “prompt settlement of all outstanding liabilities by NPDC including 4.977 billion dollars and N68.2 billion’’.
It said that NPDC should urgently settle the consideration for the divested assets from the Nigerian Agip Oil Company Joint Venture (NAOC JV).
It said that an investigation aimed at unravelling all issues surrounding the transaction involving transfers of the Oil Mining License (OMLs) to NPDC, and overdue period taken to remit all liabilities should be initiated by the Federal Government.
It said that the federal government should review the proprietary rights, processes and transactions involving the assignment of OMLs from NAOC JV to NPDC by NNPC.
NEITI also said that federal government should review the processes and transactions leading to the assignment of OMLs from SHELL JV to NPDC.
It sought the recovery of all cash call paid to NPDC in respect of the divested assets totalling $148.29 million and N2.42 billion.
It said that National Petroleum Investment Management Services (NAPIMS) and NPDC should provide details of all cash calls paid on divested assets for review.
NEITI said that NPDC should provide proper account of lifting and payments to the federation on fields operated on behalf of the federation for which cash calls were made.
Besides, the document said that “NEITI believes that the assignments of the OMLs were not arm’s length transactions and were also undervalued.
“NPDC has continuously enjoyed full rights and benefits accruing from the assets transferred as dictated by the terms of the deed of assignment that is, Oil and Gas revenue from the assigned fields have been paid to the account of NPDC.
“The NNPC did not declare any surplus to the federation from the operations of the group since these OMLs were assigned to its subsidiary.
“However, NNPC explained in the2014 NEITI Oil and Gas Audit report that the Good & Valuable Consideration in respect of the divested OMLs (60, 61, 62 and 63) was received from DPR in the 3rd quarter of 2016 valued at 2.225 billion dollars.
“NNPC has accordingly written to DPR requesting further engagement to ascertain the basis and assumptions that went into the valuation as to the reasonableness of the amount taking cognizance of all associated risks and assess its impact on the NNPC bottom line.
“While waiting for the determination of the Good and Value Consideration, NNPC indicated that it has already remitted about 13 billion dollars straight to the Federation Account from the gas revenue derived from the assigned assets from January 2013 to date.
“NPDC admitted that they were owing, but added that they had remitted only N100 million to the federal government.’’
The Managing Director of NPDC, Mr Yusuf Matashi, who spoke at the hearing, did not however say when the balance would be remitted to the government
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