To the Peoples Democratic Party (PDP), the Nigerian National Petroleum Corporation (NNPC) is economical with the truth on remittances into the Federation Account. But, the All Progressives Congress (APC) says PDP is crying wolf where there is none, describing the claim as bogus. In its response titled: “PDP allegations on NNPC operations: The facts”, the ruling party says the Federal Government earns more from the oil sector reforms, reports TONY AKOWE.
You got it all wrong”, the All Progressives Congress (APC) yesterday told the Peoples Democratic Party (PDP) on its allegations on the Nigerian National Petroleum Corporation (NNPC) operations.
The ruling party said that contrary to the PDP claim that the state-run oil corporation was short-changing the Federal Government; the various oil sector reform has yielded more revenue to the federal purse.
Relying on a leaked memo in October 2017, the PDP urged the President Muhammadu Buhari-led administration to clarify on the issues raised in the memo.
The issues on which the PDP was seeking clarification are: alleged underhand oil contacts to the tune of N9 trillion at the NNPC; alleged diversion of crude oil worth N1.1 trillion through 18 unregistered companies and unremitted revenue from crude oil sale.
In his reaction titled: “PDP allegations on NNPC operations: The facts”, the APC said the government has earned more cash from the reform it carried out in the oil sector.
The funds, the APC explained, has enabled the government to address the social and infrastructural needs of the country, as well as encouraging increased private sector participation in the sector.
In its reaction signed by Acting National Publicity Secretary Yekini Nabena, the party described the reform in oil the sector as a clear indication that the Federal Government under President Buhari’s watch has not copied the corrupt template “criminally used by the previous PDP-led administration” to siphon oil money.
The APC statement reads: “The oil sector reform has provided government more revenue to address social and infrastructural needs of the country; it has curbed the perennial fuel scarcities; increased private sector participation and resulted into remarkable investments in both refining and retails. The country is now poised to achieve self-sufficiency in terms of refining petroleum.”
The statement said that the issues being raised by the opposition include the “leaked memo detailing alleged underhand oil contracts to the tune of N9 trillion at the NNPC and the Ministry of Petroleum Resources, which are under the direct supervision of Mr. President.
“The subject of a leaked memo purportedly written by the Minister of State for Petroleum Resources to the President which came to the fore sometime in October 2017 has since been overtaken by events.
“It is a matter of public knowledge that the author of the memo openly proclaimed that the issues raised in the letter were not on fraud, but on governance and suggested ways to go about it.”
Nabena quoted the minister as saying: “I think a lot of people got it wrong. People dwell much on issues of sensationalism and leave the main substance.”
“It was clearly stated then by the NNPC in response to the leaked document that apart from the 618-kilometre Ajaokuta-Kaduna-Kano (AKK) gas pipeline project and the Nigerian Petroleum Development Corporation (NPDC) production service contracts, all the other transactions mentioned in the memo were not procurement contracts.
“The NPDC production service contracts have undergone due process, while the AKK contract had not reached the stage of contract award.
“The NNPC also stated then that it should be noted that for both the Crude Term Contract and the Direct Sale and Direct Purchase (DSDP) agreements, there are no specific values attached to each transaction to warrant the values of $10billion and $5 billion respectively placed on them in the leaked document.”
Nabena said that in view of the NNPC explanation, it was inappropriate to attach arbitrary values to the shortlists with the aim of classifying the transactions as contracts when they were merely the short listing of prospective off-takers of crude oil and suppliers of petroleum products under agreed terms.
On the allegation of diversion of crude oil worth N1.1tr, using 18 unregistered companies, the APC spokesman said: “It is also in the public domain that within the last three years, there have been massive and verifiable reforms in the sales, marketing and general management of the various grades of Nigeria’s equity crude oil.
“The reforms have manifested in the now popular public opening of bids for the sales and purchase of Nigerian crude grades in what is known as annual crude term contract.
“As at last check, the Crude Oil Marketing Division (COMD) of the NNPC had achieved 98 per cent automation of all transactions involving the supply, marketing and sale of the various grades and blends of Nigeria’s crude oil across the world.
“The automation has also helped in the following: enabled the open bid process of customer selection for lifting and purchase of Nigeria’s crude oil grades, emplacement of efficient crude for product import processes, leading to savings of $1 billion in one year as well as the introduction of improved pricing system, which has evolved into a robust and auditable pricing mechanism.
“Based on what we have today, the NNPC COMD is enabled to achieve an end-to-end monitoring of every barrel of crude oil sold in the country. At a click of a button, the NNPC can tell you how much crude oil is sold, at what price, who bought it and where it has gone to etc. It is therefore inconceivable that the PDP or anybody could ascribe such patently bogus transaction to NNPC.”
On the alleged billions of unremitted revenue from sale of crude which has led to deadlock at the Federal Accounts Allocation Committee (FAAC) several times, especially the last deadlock which was largely triggered by the contentious June 2018 monthly Federation Account Allocation Committee (FAAC) meeting, Nabena said: “It is imperative to state that current NNPC management assumed office a few years ago with a clear mandate to promote accountability and ensure efficiency in the running of the affairs of the corporation.
“The remittances to the Federation Account have never been flat as asserted. While the provision of the Medium Term Expenditure Framework (MTEF) were based on plans on the assumption of 2.3 million barrels/day (industry wide) and $50 crude oil price, actual production has averaged 1.9 million barrels/day (industry wide) and the average crude oil price has fluctuated between $50-$70.
“Therefore remittances to the Federation Account have been based on actual monthly performance for crude oil production and price as dictated by international market forces.
“The corporation during the FAAC meeting presents relevant data to support amounts remitted to the Federation Account which is verifiable.
“This increase in price was the major reason for NNPC remittance to the Federation Account in June 2018 despite 400,000 barrels/day below projected production for the month.
“To conclude, going by the current oil sector reforms, it is clear that the President Buhari administration has not copied the corrupt template the past PDP-led administrations used to criminally siphon oil revenues.
“The oil sector reforms have provided the government more revenue to address social and infrastructural needs of the country; is curbing the perennial fuel scarcities; increased private sector participation and resulted remarkable investments in both Refineries and Retails. The country is now poised to achieve self-sufficiency in terms of refining petroleum.”