NNPC Ltd working with NEITI, others to reconcile alleged indebtedness to the Federation

The Nigerian National Petroleum Company Limited (NNPC Ltd.) says it is collaborating with the Nigeria Extractive Industries Transparency Initiative (NEITI) and other stakeholders to reconcile alleged indebtedness by the company and Federation Accounts Allocation Committee (FAAC). NNPC Ltd says they are working in the Reconciliation Committee set up by President Bola Tinubu to investigate, review and reconcile financial records on alleged indebtedness to the Federation by NNPC Ltd and FAAC. Mr Olufemi Soneye, Chief Corporate Communications Officer, NNPC Ltd., said this in a statement on Monday. This is coming on the heels of calls by a Non-Governmental Organisation (NGOs) for a probe of several monies allegedly owed to the federation by the national oil company.

Soneye said the claims by the group as baseless, considering the fact that NEITI itself had dismissed the allegations in its 2021 report, following series of engagements with NNPC Ltd. He said at the outset of President Bola Tinubu’s administration, it was made to sell Premium Motor Spirit (PMS) imported into the country at one third of its value. This development, he said, gave rise to an average of N400 billion monthly subsidy bill, which subsequently put a strain on its revenues and finances. “That subsidy bill accumulated up to N3.736 trillion as of May 31, 2023. With respect to gas-to-power debts, the non-payment of NNPCL’s share of upstream joint venture gas supplied to the government-owned plants had led to the accumulation of indebtedness of N174.07 billion by the federation. Similarly, the receivables due from the federation to NNPC Exploration & Production Limited (NEPL) as of May 31, 2023 amount to $712 million (equivalent to N309.07 billion at N434.08/US$1) for revenues not remitted to NEPL but paid into the federation account.

“While the federation owed NNPCL the sum of N4.207 trillion as net indebtedness, the Company was only indebted to the federation in the sum of N2.852 trillion, made up mainly of outstanding Good and Valuable Consideration (GVC). This is in respect of government upstream divestments, royalties and Petroleum Profit taxes (PPT),” he said. According to Soneye, over the years, the NNPC Ltd.’s relationship with NEITI has been very cordial, as seen in August 2020 when it became an EITI supporting company. He added that it joined a group of over 65 extractives companies, State-Owned Enterprises (SOEs), commodity traders, financial institutions and industry partners committed to observing the EITI’s supporting company expectations. 

“Indeed, aside being a signatory to several EITI’s global ethics and standards, NNPC Ltd had on the sidelines of the United Nation’s General Assembly (UNGA) in Washington DC, in September 2023, signed up to the United Nations Global Compact on human rights, labour, environment, and anti-corruption. Thereby becoming the first state-owned oil company to join the global initiative. NNPC Ltd.’s book remains open to all our stakeholders as we remain committed to delivering value to Nigerians with integrity. And as espoused in our principles of Transparency, Accountability and Performance Excellence (TAPE), the bulwark of the Mele Kyari leadership of the company,” he said.