How Nigeria lost $5.9bn to crude oil theft in 2013-Adio, NEITI boss

 By Wahab Akanji, Abuja

The Executive Secretary of the Nigeria Extractive Industries Transparency Initiative (NEITI), Mr Waziri Adio, has stated that the country lost over 5.9 billion dollars in 2013 to crude oil theft. In a chat with newsmen at a forum on Tuesday in Abuja, Adio said that 4.7 billion dollars was lost to oil theft and pipeline vandalism from the 5.9 billion dollars, adding that additional N20 billion was lost due to delay in payment made by NNPC and its subsidiaries. 

“NNPC and its subsidiaries were given 90 days to pay N20 billion, though they paid the amount but could not meet up with the credit grace period given to them by the government. If we calculate all the money that the country lost and put in fixed deposit at 12 per cent rate, on one transaction the country lost N13 billion and N7 billion on the other hand,’’ he said. 

He also said that 600 million dollars were under paid due to under assessment, as a result of non renewal of expired MOU with some oil companies. 

“We signed MOU with some oil companies that expired and because we did not renew the MOUs, the oil companies used a particular pricing methodology called realisable price. Government wanted oil companies to use official selling price; if we calculate the difference between official selling price and realisable price, the country lost 599 million dollars in one year. 

He said the money was lost due to under payment and under assessment because the oil companies were using realisable price instead of official price on expired MOUs.

Adio also recalled that the country lost 5.18 billion dollars to crude oil for Product Swap and Oil Shore Processing arrangement in one year. 

“It means that we give them crude and they give products, and then calculate the value of the product received, processing allowance, cost of freighting, clearing, demurrage. We calculated the value of products received and compared to crude given to them, then we realised that 518 million dollars was lost. 

Based on our recommendations, the present government has cancelled the arrangement to save money.’’ 

On non remittance of 3.8 billion dollars by NNPC, he said that the company divested eight assets owned by the country, saying “The country owned 55 per cent of the assets and Shell owned 45 per cent; the country’s assets were valued at 1.8 billion dollars from it 55 per cent and Shell 2.72 billion dollars from its 45 per cent. 

“As if that was not bad enough, they divested the assets to NPDC and it paid 100 million dollars out of the 1.8 billion dollars. The proper value of what Shell got from its own 45 per cent would have been 3.4 billion dollars, meaning the assets were valued at discounted price at a loss of almost 50 per cent. 

“And 100 million dollars out of 1.8 billion dollars was paid and NPDC took full ownership of the assets.’’

He recalled that NNPC collected 1.29 billion dollars outstanding from NLNG in 2013 and acknowledged receipt but did not remit the fund to the government.

Facebook Comments

Check Also

Buhari cries out over non-payment of workers’ salaries, allowances

President Muhammadu Buhari has expressed concern on growing complaints and agitations by workers in states ...

Air Transportation in a Developing Economy; the Ondo State Example

By Maxwell Adeyemi Adeleye   In the history of mankind, war has brought more destruction ...