House Summons Kyari, Emefiele over Non-remittance of N3tn Revenue

The House of Representatives has summoned the Group Managing
Director of Nigerian National Petroleum Corporation (NNPC), Mr.
Mele Kyari, and Governor of Central Bank of Nigeria (CBN), Mr.
Godwin Emefiele over alleged non-remittance of N3.235 trillion
($19.253 billion) revenue accrued from sales of domestic crude oil
in 2014.

The Chairman, House Committee on Public Accounts, Hon. Wole Oke,
issued the directive during the investigative hearing into the
audit queries issued by the office of the Auditor General of the
Federation (oAuGF) for the period under review.

This is coming barely 10 days after Kyari refused to honour the
invitation sent to him penultimate week on the illegal withdrawals
of $20.301 billion from the Nigerian Liquefied Natural Gas (NLNG)
dividends account.

According to the details of the query, oAuGF observed that from
the “examination of NNPC mandates to CBN on Domestic Crude Oil
Sales and

Reconciliation Statement of Technical Committee of Federation
Account

Allocation Committee (FAAC) meeting held in January 2014, that a
total sum of N3,234,577,666,791.35 was not remitted to the
Federation Account by NNPC within the period under review.”

The oAuGF findings further showed that, the “cost estimated for
crude oil and product losses was N55,964,682,158.99 which is about
50 percent of pipeline management cost of N110,402,541,010.88;
names of contractors, location and amount paid to each for the
pipeline maintenance were not sighted for audit verification.

“Over 31 percent\ (N826,506,271,231.26 divided by
N2,636,390,514,777.18 and multiply by 100 percent) of the realised
crude oil sales for the year were earmarked as other expenses apart
from the direct cost of productions stated in NNPC reports for the
year 2014. The breakdown of other expenses was not provided for
audit.

While requesting the Accountant General of the Federation (AGF)
to inform the NNPC group managing director to explain the flagrant
attitude of withholding domestic crude oil sales revenue by NNPC,
which should be refunded immediately, the oAuGF observed that there
was no positive response on similar issue raised in 2012.

Therefore, the OAuGF asked the NNPC GMD to “provide names of the
contractors, location, and amount paid to each for the pipeline
maintenance for verification. The process being used by

PPPRA for the repayment of subsidy to the oil marketers should
be used for NNPC instead of the latter deducting the subsidy at
source; and should stop the deduction at source by NNPC, as this is
a contravention of Section 162(1) of the 1999 Constitution which
stipulates that ‘all revenue proceeds should be paid to the
Federation Account.”

While reviewing the response of the Accountant General of
the

Federation, Oke and members of the House Public Accounts
Committee argued that the NNPC and CBN should cause appearance in
persons, as the AGF cannot provide sufficient evidence on the audit
query of such magnitude.

In the same vein, the NNPC GMD is also expected to respond to
other audit queries including: the total sum of N248,268,291,460.87
subsidy not budgeted for in the 2014 Appropriation Act;
N199,705,152,175.52 un-reconciled items in the domestic excess
crude oil account since 2012 to 2014; N392, 261,423,894.77 at
variance in the proceeds made on crude oil which was almost eroded
by JVC operational cost to the extent of realising 11.51 percent,
20.21 percent and 15.35 percent in the month of January, July and
September, 2014, which did not reflect prudence as a profit
centre.

The committee also invited the CBN governor to give account on
the N9, 923, 015, 028 collected for solid minerals for year-end
December 31, 2014.

The committee is also investigating the sum of $510,020,921.79
delayed payment for crude oil lifted some days later than the due
dates required for payments by Republic of Zambia, Aridor Oil and
Gas Limited, Calson (Bermuda) Limited, Hyde Energy Limited, Azenith
Energy Resources Limited and Duke Oil Company.

The House of Representatives has summoned the Group Managing
Director of Nigerian National Petroleum Corporation (NNPC), Mr.
Mele Kyari, and Governor of Central Bank of Nigeria (CBN), Mr.
Godwin Emefiele over alleged non-remittance of N3.235 trillion
($19.253 billion) revenue accrued from sales of domestic crude oil
in 2014.

The Chairman, House Committee on Public Accounts, Hon. Wole Oke,
issued the directive during the investigative hearing into the
audit queries issued by the office of the Auditor General of the
Federation (oAuGF) for the period under review.

This is coming barely 10 days after Kyari refused to honour the
invitation sent to him penultimate week on the illegal withdrawals
of $20.301 billion from the Nigerian Liquefied Natural Gas (NLNG)
dividends account.

According to the details of the query, oAuGF observed that from
the “examination of NNPC mandates to CBN on Domestic Crude Oil
Sales and

Reconciliation Statement of Technical Committee of Federation
Account

Allocation Committee (FAAC) meeting held in January 2014, that a
total sum of N3,234,577,666,791.35 was not remitted to the
Federation Account by NNPC within the period under review.”

The oAuGF findings further showed that, the “cost estimated for
crude oil and product losses was N55,964,682,158.99 which is about
50 percent of pipeline management cost of N110,402,541,010.88;
names of contractors, location and amount paid to each for the
pipeline maintenance were not sighted for audit verification.

“Over 31 percent\ (N826,506,271,231.26 divided by
N2,636,390,514,777.18 and multiply by 100 percent) of the realised
crude oil sales for the year were earmarked as other expenses apart
from the direct cost of productions stated in NNPC reports for the
year 2014. The breakdown of other expenses was not provided for
audit.

While requesting the Accountant General of the Federation (AGF)
to inform the NNPC group managing director to explain the flagrant
attitude of withholding domestic crude oil sales revenue by NNPC,
which should be refunded immediately, the oAuGF observed that there
was no positive response on similar issue raised in 2012.

Therefore, the OAuGF asked the NNPC GMD to “provide names of the
contractors, location, and amount paid to each for the pipeline
maintenance for verification. The process being used by

PPPRA for the repayment of subsidy to the oil marketers should
be used for NNPC instead of the latter deducting the subsidy at
source; and should stop the deduction at source by NNPC, as this is
a contravention of Section 162(1) of the 1999 Constitution which
stipulates that ‘all revenue proceeds should be paid to the
Federation Account.”

While reviewing the response of the Accountant General of
the

Federation, Oke and members of the House Public Accounts
Committee argued that the NNPC and CBN should cause appearance in
persons, as the AGF cannot provide sufficient evidence on the audit
query of such magnitude.

In the same vein, the NNPC GMD is also expected to respond to
other audit queries including: the total sum of N248,268,291,460.87
subsidy not budgeted for in the 2014 Appropriation Act;
N199,705,152,175.52 un-reconciled items in the domestic excess
crude oil account since 2012 to 2014; N392, 261,423,894.77 at
variance in the proceeds made on crude oil which was almost eroded
by JVC operational cost to the extent of realising 11.51 percent,
20.21 percent and 15.35 percent in the month of January, July and
September, 2014, which did not reflect prudence as a profit
centre.

The committee also invited the CBN governor to give account on
the N9, 923, 015, 028 collected for solid minerals for year-end
December 31, 2014.

The committee is also investigating the sum of $510,020,921.79
delayed payment for crude oil lifted some days later than the due
dates required for payments by Republic of Zambia, Aridor Oil and
Gas Limited, Calson (Bermuda) Limited, Hyde Energy Limited, Azenith
Energy Resources Limited and Duke Oil Company.