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NPDC to pay outstanding liabilities to federation account

by Business News Report

The Nigerian Petroleum Development Company, NPDC, the upstream subsidiary Company of the Nigerian National Petroleum Corporation, NNPC, has given reasons for the non-remittance of its gross earnings to the Federation Account, stating that it is as a result of the fact that it is a self-financing subsidiary.

Managing Director of NPDC, Mr. Yusuf Matashi, stated this in a presentation to the Senate Ad hoc Committee on the recovery of unremitted revenue,
Providing clarification on the alleged non-remittance of crude proceeds from some divested oil wells, Oil Mining Leases, OML, 61, 62 and 63, Matashi explained that the value of crude oil lifted by NPDC between May 20013 and August 2016 was $3.294 billion as against $3.487 billion being claimed by the Committee.
He drew the attention of the Committee to the fact that on the basis of the Ministerial assignment of the assets to NPDC, cash call funding of the assets by government had ceased and NPDC is funding the cost of production and lifting of crude oil by itself.

“Like all other indigenous oil and gas companies operating in Nigeria, the NPDC is self-funded which means that gross revenue are not remitted to the Federation Account,” Matashi explained.
He faulted some of the figures quoted as revenue derived by the company from crude sales, noting however, that the NPDC was required to pay Royalties to the Department of Petroleum Resources, DPR and Petroleum Profit Tax, PPT to the Federal Inland Revenue Service, FIRS.
He said, “According to our records total crude oil lifted from OMLs 60-63 by NPDC during the period May 2013 to August 2016 is valued at $3.294 billion against the figure of $3.487 billion.”
On the allegation that NPDC has been lifting crude oil from divested oil well (OMLs 65, 111 and 119) to the tune of $1.847 billion out of which it paid $100m only, Matashi said that the OMLs 65, 111 & 119 referred to by the Senate Committee are not part of the divested assets.
He argued that the figures given refer to the Good Valuable Consideration obligation payments in respect of the Shell Petroleum Development Company, SPDC divested asset, OMLs 4, 38 & 41 and OMLs 26, 30, 34, 40 & 42.
“The $1.847 billion referred to by the Committee is the total Good and Valuable Consideration (G&VC) determined by DPR for the divested assets. The $100 million referred to as paid is part of the G&VC which has been paid by NPDC,’’ he said.
While recognizing the balance of $1.747billion for the G&VC, the NPDC boss noted that the obligation to pay in the future has not been waived and that the balance as payable to the Federation account is recognized in NPDC’s books.
On the report that a total of $344.3442 million worth of crude oil has been unremitted between January and August 2016 including non-payment of due royalties and taxes within the period, the NPDC boss faulted the claim.
“The committee is invited to note that the actual value of crude oil liftings from all assets divested to NPDC is a total of $584.1 million for the period January to August 2016. NPDC has paid a total of $608.4 million as royalty and PPT,’’ he said.
Matashi, noted that a total of $608.417 million was made by the NPDC as Royalty and Petroleum Profit Tax in 2016.
He however, stated that the NPDC is ready to engage all stakeholders to resolve all outstanding payments noting that the Company is already in talks with statutory agencies to arrive at agreed installed payments of historical liabilities.
The Co-Chairman of the Senate Ad hoc Committee, Senator Kabiru Marafa expressed the readiness of the Senate to work with the Corporation and other stakeholders to ensure proper accountability and probity in the handling of crude oil proceeds.

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