FG exempts NNPC, PHCN, BoI, 11 others from TSA

The Office of the Accountant-General of the Federation has exempted 13 Ministries, Department and Agencies (MDAs) from the Treasury Single Account (TSA). In a circular released yesterday September 21st, the accountant general said they were exempted because they are entities classified as profit oriented government businesses, pay dividends to the Federal Government.

The exempted MDAs are the Nigeria National Petroleum Corporation (NNPC), Power Holding Company of Nigeria, Bank of Industry (BoI), Nigeria Railway Corporation, Federal Mortgage Bank of Nigeria, Bank of Agriculture, Niger Delta Power Holding Company/National Integrated Power Project, National Communication Satellite Limited, Galaxy Backbone Limited, Ajaokuta Steel Company Limited, Urban Development Bank, Nigerian Export-Import Bank NEXIM) and Transcorp Hilton Hotel.

A circular entitled, “Approval to Exempt Some MDAs In line With the e-Collection Mop-Up Exercise,” from the AGF’s office to The Director, Central Bank of Nigeria (CBN), Banking and Payments System Department, referenced FD/LP2015/C/ADC/20/1/ /DF dated September 14, 2015 and signed by M. K, Dikwa, for the AGF, Federal Ministry of Finance, Funds Department, Abuja, reads in part: “Approval is hereby granted to your bank to exempt the accounts of thirteen (13) MDAs (Category 6) as listed below the mop-up in line with the e-Collection Circular No. HCFSF/428/S.1/120 dated 7th August 2015 as these are Profit-Oriented Government Business entities that are to pay their dividends into the Treasury Single Accounts whenever they are declared.

Please note that in line with the Presidential approval, the following as it relates to Nigeria National Petroleum Corporation NNPC as listed above (S/No.9) under Category 4 should also apply: That NAPIMS remains classified as an MDA that is funded from the Federation Account under Category 4 of the Circular, being the NNPC Business Unit responsible for the management of the Federation’s investment in the upstream activities and funded from direct proceeds of oil and gas revenue.

That NNPC will continue to preserve the status with respect to NAPIMS Operations Account as well as Escrow Account for Third Party Financing in view of the Joint Venture (JV) Cash funding currently being experienced. That all other NNPC’s commercial/Business Entities as re-classified as ‘Profit-Oriented Public Corporations /Business Enterprises’ under Category 6 of the Circular which requires that only dividends from these entities be paid into the TSA.”.

Buhari Appoints PwC, KPMG to audit NNPC, CBN, Others

The Federal Government has appointed international audit firms, KPMG and PriceWaterhouse Cooper, to conduct comprehensive audit of the accounts of the Nigerian National Petroleum Corporation (NNPC) and other revenue generating agencies from 2012 to 2015.

Edo state governor, Adams Oshiomole announced this after the second meeting of the National Economic Council (NEC) in Abuja today August 13th.

“The probe will now cover value for expense as the affected agencies will be made to account for things expended on at their correct value. This is about making Nigeria work for the benefit of other Nigerians and we have to bear in mind that governments are not run on the basis of collection of crude oil but government regardless of colour or political affiliation is run on race and so if you have tax generating agencies that are not remitting taxes government cannot run like that" he told state house correspondents

All NNPC Group Executive Directors Fired

Report has it that all of the Nigerian National Petroleum Corporation Group Executive Directors (GEDs) have been sacked effective immediately. This news comes only one day after President Buhari appointed Emmanuel Ibe Kachikwu as the Group Managing Director of the NNPC.

The GEDs fired are Mr. Ian Udoh leading Refining and Petrochemicals, Mr. Adebayo Ibirogba leading the Engineering and Technical team, Dr. David Ige leading Gas and Power, Dr. Attahir Yusuf leading Business Development; Dr. Dan Efebo leading Corporate Services, Mr. Bernard Otti in charge of Finance and Accounts, Ms. Aisha Abdurrahman leading Commerce and Investments, and Mr. Joseph Dawha leading Exploration and Production.

The former President Jonathan appointed all these GEDs in March, 2014.

Saharareporta

Recover stolen oil money, Buhari tells NNPC boss

President Muhammadu Buhari appointed Dr. Emmanuel Ibe Kachikwu, the Executive Vice Chairman/General Counsel of ExxonMobil (Africa), as Group Managing Director (GMD), asking him to give recovery of stolen oil money a priority, among other targets.

Buhari may also appoint Kachikwu, who beat three other candidates in the race for the job, as the Minister of State for Petroleum Resources to ensure synergy, a source said last night.

Those also considered and discreetly screened for the job, source told The Nation learnt, are former Petroleum Products Prices Regulatory Agency (PPPRA) Executive Secretary Stanley Reginald; Shell Petroleum Development Company Managing Director Mr. Osagie Okunbor and a NNPC Deputy General Manager, whose name was not disclosed.

At the final negotiation with Kachikwu, the President gave him six terms of reference to reshape the corporation. They are to:
clean up the NNPC system of corrupt elements;
recover all stolen crude oil funds;
work with the Economic and Financial Crimes Commission (EFCC) and the Directorate of State Service (DSS) to trace and recover stolen oil cash;
review the structure of the NNPC to compete globally;
giving targets to all subsidiaries and put in place performance benchmarks; and
fixe all refineries, which must work at optimal level, “even if it means using expatriates in the interim”.

A source said: “The new GMD of NNPC was picked after a thorough search by the President. Actually, at the end of the search, the choice was narrowed down to four candidates.

“The President opted for Kachikwu who is the Vice President of Exxon Mobil, not only in Nigeria but in Africa. Buhari was impressed by his impeccable credentials as the most senior black African in any multi-national oil firm in the world with 30 years experience.

“Apart from being a First Class graduate, Kachikwu also obtained PhD in Law which enabled him to rise to company secretary in Exxon Mobil.”

But it was not easy for the President to convince Kachikwu to accept the job because he was afraid that he might be messed up like other Nigerians, a source said.

“In their negotiation, President Buhari repeatedly said: ‘I won’t interfere with your work; I will give you a free hand because I want to reform this oil sector once and for all.’ The GMD accepted the job following what he realized as “the infectious patriotism and genuine intention of the President,: the source said.

Kachikwu yesterday took the reins at a brief ceremony held at the NNPC Towers, Abuja .

The Group General Manager, Group Public Affairs Division, Mr. Ohi Alegbe, in a statement, said the new helmsman expressed gratitude to his predecessor, Dr. Joseph T. Dawha, for holding the Corporation. He pledged to work assiduously in achieving the President’s growth aspiration for the oil and gas industry.

“ExxonMobil Upstream affiliates in Nigeria congratulate our Vice-Chairman and General Counsel, Dr. Emmanuel Kachikwu, on this opportunity to serve Nigeria as Group Managing Director of the Nigeria National Petroleum Corporation (NNPC). We thank Dr. Kachikwu for his many contributions to ExxonMobil Nigeria, and wish him well in his new role.”

Thenation

Nigeria Lost N6.4tr to NNPC Oil Sales Corruption – NRGI Report

An independent investigative analysis by the Natural Resource Governance Institute (NRGI) has revealed that over $32 billion oil revenue was lost to NNPC’s mismanagement of Domestic Crude Allocation (DCA), opaque revenue retention practices and corruption-ridden oil-for-product swap agreements.

The report offered a deep, independent analysis of how NNPC sells its oil, and found that the national oil company’s discretionary spending from domestic crude oil sale revenues has skyrocketed, exceeding $6 billion a year for the 2011 to 2013 period (i.e. over $18 billion in three years).

Also, the in-depth research found no evidence that NNPC, between 2004 and 2014, forwarded to the treasury any revenues from sales of Okono crude with volumes of over 100 million barrels, with an estimated value of $12.3 billion.

In other words, the corporation has provided no public accounting of how it used a decade’s worth of revenues from an entire stream of the country’s oil production.

In the same manner, losses from three provisions in a single, offshore processing agreements (OPAs) contract, estimated at $381 million in one year (or over $1.9 billion between 2010 till date), were identified.

This is aside the fact that NNPC channeled Nigeria’s precious crude — worth $35 billion –to swap deals between 2010 and 2014, the recent offshore processing agreements (OPAs) containing unbalanced terms that did not efficiently serve Nigeria’s needs and interest.

The report, whose executive summary was exclusively made available to PREMIUM TIMES ahead of its public release Tuesday or Wednesday, provided additional insight regarding the monumental corruption characterizing NNPC operations and those of its subsidiaries.

The document argued that NNPC’s approach to oil sales has remained riddled with corruption largely because of its inability to either develop its own commercial or operational capacities, or facilitate the growth of the sector through external investment.

Corroborating the NEITI, PwC and Reconciliation Committee’s assertions about NNPC’s legacy of inefficiency and mismanagement, NRGI researchers submitted that NNPC’s mismanagement of public revenues and its performance failures has persisted due to lack of political will by successive governments to reform the corporation.

The report pointed at the degenerating management of NNPC’s oil sales in recent years—and particularly since 2010.

The problems, it said, stemmed from the rising number of ad hoc, makeshift practices the corporation has introduced to work around its deeper structural problems.

For instance, the corporation entered into a poorly designed oil-for-product swap deals when it could no longer meet the country’s fuel needs.

Similarly, it began unilaterally spending billions of dollars in crude oil revenues each year, rather than transferring them to the treasury, because its actual budgets consistently fail to cover operating expenses.

Some of these makeshift practices began with credible goals, the report said. But over time, their operation became overly discretionary and complex, as political and patronage agendas surpassed the importance of maximizing returns.

The report identified five key areas bordering on the most pressing problems enveloping NNPC oil sales.

Researchers said they arrived at their findings after reviewing published and unpublished official records, together with data from trade publications and secondary literature, and conducted dozens of interviews between 2010 and 2015.

The report made valuable recommendations, which somehow buttressed a recent statement by Kaduna Governor, Nasir El-Rufai, about the need to either scrap the NNPC or reform the oil and gas sector as a whole.