FAAC: The Federation Accounts Allocation Committee (FAAC) has expressed concern over non-remittance of $3.28 billion, representing 43,645,678 barrels of crude oil lifted by Nigerian Petroleum Development Company (NPDC), a subsidiary of the Nigerian National Petroleum Corporation (NNPC) into the federation account, New Telegraph learnt.
The figures were established by a designated FAAC sub-committee saddled with the task of carrying out exhaustive computation of crude oil lifted by the NPDC from 2013 to April 2016.
The crude oil was said to have been lifted from divested oil wells. FAAC, an impeccable source hinted New Telegraph, directed the NNPC at its last session in Abuja to “deposit the money into escrow account pending the conclusion of divestment process.” “According to FAAC subcommittee report on crude oil lifting by NPDC, mem bers would recall that the sub-committee reported last month that NPDC, a subsidiary of NNPC, lifted substantial amount of equity crude oil whose value had not been credited to the federation account.
“As a follow-up, the subcommittee took time to compute crude oil lifting by NPDC from the year 2013 to April 2016 and it was observed that the company lifted 43,645,678 bbls valued at $3.28 billion. NNPC was requested to deposit the money into escrow account pending the conclusion of the divestment process,” the FAAC document sighted by New Telegraph stated.
Though it was learnt that the NNPC management responded to previous memo from FAAC on same matter, which insider source said has been dragging, with an assurance that it would request NPDC to furnish FAAC with details of its operations, the body had yet to receive response of NNPC subsidiary.
A document on equity crude oil lifting stock exclusively sighted by New Telegraph showed that the contentious amount was realised from crude oil lifting OMLs 60, 61, 62 and 63 by NNPC on behalf of NPDC at brass terminal.
New Telegraph had, three months ago, exclusively reported of a seeming disagreement between state-owned oil firm and FAAC over the funds realised from divested oil wells taken over by NPDC. FAAC had demanded the state corporation to provide evidence of payments into the federation account by NPDC from crude oil lifted from divested oil wells on behalf of the federation from inception of divestment in 2013 to April this year.
The contentious oil wells are fields divested by Shell Petroleum Development Company (SPDC) and Chevron Nigeria Limited (CNL), which were transferred to NPDC, the upstream arm of NNPC. Prior to FAAC’s directive, the organ had raised the alarm that both quantities of crude oil and real monetary value that accrued from inherited oil wells were not transparently handled by NPDC on behalf of the body.
As at June this year, NNPC was said to have lifted 6,396,572 barrels of crude oil valued at N37.96 billion on behalf of NPDC between January and February 2016 from inherited oil wells. FAAC had expressed doubt that despite the drop in the federation’s crude oil volume, NPDC continued to lift substantial quantity of crude with little or no value to the federation account.
The NNPC, in its response to FAAC’s observations, noted: “NPDC is a 100 per cent NNPC-owned upstream company that operates under the sole risk commercial arrangement. Under this fiscal regime, NPDC as the flagship upstream company of NNPC is not expected to sweep all its revenues to the federation account.”
FAAC is the custodian of federation account and meets every month to consider revenue flow to the account and approved for sharing using existing formula to federal, states, and local governments while 13 per cent is paid out to oilproducing states.
The divestment of Oil Mining Leases (OMLs) 60, 61, 62 and 63 was allegedly soaked in controversy that cost Nigeria about $2 billion. Checks revealed that a strategic alliance agreement between the NPDC and Atlantic Energy Drilling Concepts Nigeria Limited (AEDCNL) helped parties in the Strategic Alliance Agreement (SAA) to allegedly swindle the government.
Four years after the alliance, everything suggests that NPDC and Atlantic Energy owe Nigerians a lot of explanations regarding how OML 60, 61, 62 and 63 including 26, 30, 34, 42,– were handled between 2011 and 2014. Again, the promoters incorporated the Atlantic Brass Development Company Limited on February 5, 2013. As usual, it was hurriedly granted another set of SAA. The SAA covered another set of 4 blocks: OML – 60; OML – 61; OML – 62; OML – 63.
Unlike in the previous deals in 2011 and 2012, when it paid a fraction of obligatory funds, the company simply pocketed all the proceeds, paying no signature bonus or any cash calls at all despite lifting about 8 million barrels of crude oil, valued at $800 million at the time. Instead, various amounts of money were transferred to the accounts and investment companies in UK, Dubai and Switzerland.
They also opened mirror accounts of Atlantic Energy Brass in the UK and Switzerland. NPDC, in a letter dated May 6, 2015 however asked Atlantic Energy to pay its outstanding indebtedness OMLs 26, 30, 34, and 42, totalling $573,668,090.
An analysis of the reconciliation sheet revealed that the $573,668,090 was just a fraction of the cash calls, as some huge returns that were yet to be subjected to technical and financials by the two parties were not included.
But the bad state of finances on OMLs 26, 30, 34, and 42 paled when compared with that on OMLs 60, 61, 62 and 63 where Atlantic Energy owes NPDC a staggering $1,250,644,474.54. 1 Like 
|
