We paid $608m to federation account in 2016, says NPDC

The Nigerian Petroleum Development Company (NPDC), the upstream subsidiary company of the Nigerian National Petroleum Corporation (NNPC), has provided clarification on the reported non-remittance of some crude oil revenue to the federation account.

Earlier, the Nigeria Extractive Industries Transparency Initiative (NEITI), in its 2014 audit report, said a total of $4.7 billion and N318.2 billion that should have gone to the federation account were not remitted by NPDC and its parent company, NNPC.

In a presentation to the senate ad hoc committee on the recovery of unremitted revenue, Yusuf Matashi, managing director of the NPDC, faulted some of the figures quoted as revenue derived by the company from crude sales.

Providing clarification on the alleged non-remittance of crude proceeds from some divested oil wells (OMLs 61, 62 and 63), Matashi explained that the value of crude oil lifted by NPDC between May 20013 and August 2016 was $3.294billion, as against the $3.487 claimed by the committee.

The NPDC MD drew the attention of the committee to the fact that on the basis of the ministerial assignment of the assets to NPDC, cash call funding of the assets by government had ceased and NPDC was funding the cost of production and lifting of crude oil by itself.

“According to our records total crude oil lifted from OMLs 60-63 by NPDC during the period May 2013 TO August 2016 is valued at $3.294 bn against the figure of $3.487billion,” he was quoted by Ndu Ughamadu, the NNPC spokesperson, to have said.

On the allegation that NPDC had been lifting crude oil from divested oil well (OMLs 65, 111 and 119) to the tune of $1.847 billion out of which it paid $100m only, the NPDC MD explained that the OMLs 65, 111 and 119 referred to by the senate committee were not part of the divested assets.

He argued that the figures given refer to the Good Valuable Consideration obligation payments in respect of the Shell Petroleum Development Company (SPDC) divested asset (OMLs 4, 38 &41 and OMLs 26, 30, 34, 40 &42.

“The $1.847 billion referred to by the committee is the total Good and Valuable Consideration (G&VC) determined by DPR for the divested assets. The $100m referred to as paid is part of the G&VC which has been paid by NPDC,” he said.

While recognising the balance of $1.747billion for the G&VC, the NPDC noted that the obligation to pay in the future had not been waived and that the balance as payable to the Federation was recognized in NPDC’s books.

On the report that a total of $344.34m worth of crude oil had been unremitted between January and August 2016, including non-payment of due royalties and taxes within the period, the NPDC faulted the claim.

“The committee is invited to note that the actual value of crude oil liftings from all assets divested to NPDC is a total of $584.1 million for the period January to August 2016. NPDC has paid a total of $608.4 million as royalty and PPT,’’ he said.

Matashi noted that a total of $608, 417, 937 was made by the NPDC as royalty and petroleum profit tax in 2016.

Also providing response to the issues raised by the senate committee on the legal and operational status of the NPDC, Matashi explained that like all other indigenous oil and gas companies operating in Nigeria, the NPDC is self-funded, which means that gross revenue are not remitted to the federation account.

He said that the company is however required to pay royalties to the Department of Petroleum Resources (DPR) and petroleum profit tax (PPT) to the Federal Inland Revenue Service (FIRS).

Matashi however stated that the NPDC is ready to engage all stakeholders to resolve all outstanding payments, noting that the company is already in talks with statutory agencies to arrive at agreed payments of historical liabilities.