The Executive Secretary of Nigeria Extractive Industries Transparency Initiative, NEITI, has recanted its earlier position that it uncovered $22.8 billion un remitted oil revenue by the Nigerian National Petroleum Corporation.
NEITI Director of Communication, Dr. Orji Ogbonnaya Orji, said also that, media report from that presentation attributed to NEITI that the nation losses $8 billion annually through crude oil Swap was not only wrong but misleading.
Orji in a statement yesterday explained that, “on 26thFebruary, 2014, the Executive Secretary of Nigeria Extractive Industries Transparency Initiative, NEITI, Mrs. Zainab Ahmed was invitedto make a presentation to the House of Representatives Committee on Petroleum Upstream, investigating the alleged connivance of the NNPC with Swiss Oil Dealers.”
He said “NEITI’s presentation to the Committee was based on the findings and recommendations of its 2009 – 2011 independent Oil and Gas Industry Audit Reportwhich is in the public domain and on the NEITI website.
“All relevant government agencies, relevant committees of the National Assembly, companies, the media and civil society have copies of the Report which was also made public since last year.
“However, since NEITI’s appearance at that Public Hearing, we are concerned that the contents of our presentation to the esteemed Committee have been largely misconceived, misinterpreted and misrepresentedby some sections of the media.
“As an Agency with principles, methods, procedures and mandate firmly rooted in transparency, accountability and integrity, we are constrained to make some clarifications on key issues that were certainly not correctly reported by the media following that presentation.
“This clarification has become necessary in the overriding public interest, NEITI stakeholders, our international partners and the global Extractive Industries Transparency Initiative.
Dr. Orji noted that, “the media report from that presentation attributed to NEITI that “the nation losses $8 billion annually through crude oil Swap”.This is not only wrong but misleading. What NEITI presented and explained at that Hearing was that “there is no cost efficiency in the transactions with the offshore processing organizations.
“By this we mean that the total cost of offshore processing when compared with the reported price of PMS, DPK, AGO and other retained products proceeds paid to NNPC is not economically beneficial to the country. This is as a result of the under deliveriesof petroleum products to the tune of $866 million by the companies involved in the swap.
“From the same presentation, another report attributed to NEITI, stated that the Agency has uncovered $22.8 billion unremitted funds to the Federation. This report carried by several newspapers is equally inaccurate.
“What NEITI presented and explained at the Public Hearing was that “the Federal Government, through the NNPC entered into Alternative Funding/Financing arrangements with its JV partners in the form of third party financing from external financial markets, i.e. banks, and Modified Carry Arrangements (MCA) which are loans from existing JV partners, IOCs.
“NNPC’s share in the third party financing is paid to CBN/NNPC crude oil and gas Dollar revenue account and subsequently swept to the federation accounts while under the MCA an escrow account is opened at the lenders’ bank into which buyers pay proceeds from the crude oil and gas sales.
“NEITI observed that these transactions which sum up to $22.8billion are off balance sheet items, not disclosed in NNPC’s audited financial statements. The implication is that there may be significant contingent liabilities to the federation that is not being disclosed.
“We need to state further that it does not mean that NEITI has discovered some funds hidden somewhere or monies that were unaccounted for by the NNPC. That was why NEITI recommended that all alternative funding arrangements should be disclosed in the audited financial statements of NNPC for clarity and openness in line with the EITI principles.
“These misrepresentations notwithstanding, NEITI appreciates the continuous support of the media in the implementation of the principles of the Extractive Industries Transparency Initiative in Nigeria.”
