Home Finance PWYP faults NNPC over $3 billion loan from oil firm…backs proposed probe of NNPC

PWYP faults NNPC over $3 billion loan from oil firm…backs proposed probe of NNPC

by Business News Report

By Luka Binniyat
ABUJA – Publish What You Pay Nigeria (PWYPN) campaign has condemned the $3 billion loan facility signed by the Nigerian National Petroleum Corporation (NNPC) to finance its Joint Venture (JV) contract in the Petroleum Sector with Mobil and Elf Total Plc
The PWYPN, which represented Civil Society Organisations (CSOs) in the last Board of the Nigerian Extractive Industry Transparency Initiative (NEITI), said the terms of repayments of the loans are kept secret and may have been entered in manner that will defraud Nigeria in the long run, as against the 2007 NEITI Act.
All the terms of Joint Venture Contract entered by the NNPC are always secretly guided, with the public having no idea if truly the Oil firms really contribute any funding at all.
PWYP campaign is a coalition of 300 Non Governmental Organisations (NGOs) worldwide aimed at instilling transparency in revenues from oil and mining resource-rich developing countries.

The Chairman of PWYP, Nigeria, Rev. David Ugolor, at a Press Conference in Abuja said that it was wrong for the NNPC to negotiate such huge loans all by it self without allowing critical input by stakeholders, such as the National Assembly, NEITI before taking the loans.
“These oil companies have the best of Lawyers and I can’t see how the NNPC can beat them into negotiating in a manner that will favour Nigeria”, he said.
He said that since no one except the NNPC and the two oil companies know the clauses entered for the loans, the deal should be cancelled and be allowed for popular appraisal in the name of transparency in the industry.
It could be recalled that in May this year, the NNPC entered into a $1 billion loan agreement with Total Elf, one of its JV partners and another $2 billion loan deal with Mobil as part of the corporation’s move for alternative funding to the JV contract, put at $15.2 billion for 2008. Government’s share of the JV is $8.8 billion out of which $4.9 billion was captured in the 2008 Appropriation Act. The remaining $3.9 has to be sourced outside government coffer as explained by management of the NNPC.
But, the PWPN said there is utter lack of transparency in the deal, since it was entered secretly just to be signed in public with Nigerians having no idea what are the terms of its repayments sundry details.
PWYPN has also backed the proposed probe of the NNPC, but cautioned that resources should be wasted on certain aspect of the probe which are adequately contained in the NIETI Audit of the sector between 1999 to 2004 and in the Value-for-money 2005 report, that deals with corruption in oil contracts.
“The National Assembly is well commended for this initiative”, he said and the PWYP will be submitting its own memorandum at the probe”, he said.
“But we want to inform the House that government has invested so much money in the NEITI Audit, which captured the activities of the oil sector in terms of Process, Finance and Physical”, he said, adding that the report of the 2007 NEITI Audit of the oil sector will also be soon released.
Rev Ugolor said that the PWYP will deeply participate in the probe and will make sure that all the findings and recommendations are seriously acted open.
“We are ready to go to court if there is an attempt to sweep the issues under the carpet”, he vowed.

File : NNPC 21/08/08

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