By Benjamin Umuteme
Abuja
Nigeria’s oil and gas industry audit for 2015 has shown that Nigerian Petroleum Development Corporation (NPDC), reduced its legacy liabilities from $1.45 billion and N80 billion in 2014 to $757 million and N68 billion in 2015.
Despite clearing its legacy debts, the NPDC incurred liabilities of $822 million and N9.6 billion in 2015, bringing its total liabilities at the end of 2015 to $1.5 billion and N78 billion.
According to the Nigeria Extractive Industry Transparency Initiative (NEITI) report, the Corporation is expected to pay the balance of $1.7 billion that it owes the Federation from the eight OMLs divested to it from the Shell JV between 2010 and 2011, it promised by 31st December 2017.
It will be recalled that NPDC had paid only $100m for the OMLs valued at $1.8 billion. However, report also showed that the valuation for the four OMLs divested to NPDC from the NAOC JV in 2012 was revised down from $2.25 billion to $1.55 billion by DPR. NPDC claims that the Federation owes it $95 million, having lifted oil from the divested assets and received payments from gas proceeds between 2012 and 2015.
NEITI showed that of the 153.92 million barrels of crude allocated for domestic consumption for the year under review amounting to N1.5 trillion, 56.11 million barrels representing 37 per cent went to PPMC for export; 89 million barrels or 57 per cent for Offshore Processing Arrangement (OPA) while the remaining 8.74 million barrels which is about 5.6 per cent was for non functional local refineries.
“When combined with the closing balance for the previous year and with allowance made for liability acknowledged and upfront deductions by NNPC, there was an un-reconciled sum of N317 billion from the value of crude allocated for domestic consumption. NNPC acknowledges having a liability of N418 billion as at 31st December 2015. Also, NNPC deducted the following upfront from domestic crude account: N60.9 billion for losses; N316.7 billion for subsidy; and N112 billion for repairs and maintenance,” the report noted.
The report further showed that N24.2 billion was spent on crude movements; N22.1 billion on fund releases for salaries; N15.6 billion on demurrage; N13.2 billion on share of upfront; N11.37 billion on product distribution; N10.5 billion on through/marine; N4.12 billion on facility repairs; N3.27 billion on operations; N1.9 billion on security; and N1.3 billion on projects, among others.
