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Withdrawal of $1.05bn from NLNG dividend account legal – NNPC

Withdrawal of $1.05bn from NLNG dividend account legal – NNPC

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“We have provided the legal authority on which we rely upon to use funds from the NLNG dividend account to the Senate.”

Uche Usim and Adewale Sanyaolu

For the umpteenth time, the Nigerian National Petroleum Corporation (NNPC) has provided further insights into its $1.05 billion withdrawals from the Nigerian Liquefied Natural Gas (NLNG) Limited dividend account, insisting the action was in line with laid down procedures. This was even as the Corporation threatened to seek a legal interpretation on whether it has the right to withdraw funds from the Nigeria LNG Dividend Account without the approval of the National Assembly.

Chief Financial Officer (CFO), NNPC, Mr Isiaka Abdulrazaq, made the clarification at an interactive session with the media in Lagos at the weekend.

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The CFO clarified that the Senate probe was not about missing money as being insinuated in some quarters, but rather an investigation on whether NNPC acted legally in withdrawing the sum of $1.05 billion from the NLNG dividend account to support fuel importation.

According to him, while acknowledging the statutory right of the legislators to carry out their oversight functions in several sectors of the economy, the NNPC CFO insisted that relevant extant laws such as the Appropriation Act 2018 defines revenue from NNPC as net of cost, indicating that NNPC has the right to defray the cost of its operations from earnings.

He also cited the NLNG Act, which explicitly provides that NNPC could defray its cost from the dividends, as one of the legal grounds relied upon for the expenditure without recourse to appropriation by the National Assembly.

Giving further insights, Abdulrazaq cited the case instituted by some state governments in 1999 seeking the interpretation of revenue on account of their contention that all accruals from oil and gas operations amount to revenue and should be swept into the Federation Account.

The ruling on that case by the Supreme Court in 2002, according to him, was in tandem with NNPC’s position that revenue is accruals net of cost.

“We have provided the legal authority on which we rely upon to use funds from the NLNG dividend account to the Senate. We believe they will reason with us. But if need be, we will seek legal opinion on it,” the CFO stated.

On the general impression that NNPC and indeed the entire Oil and Gas Industry is opaque, Mr. Abdulrazaq contended that in the light of efforts made by the Management of the NNPC since the inception of the President Muhammadu Buhari administration to entrench a culture of transparency, nothing could be further from the truth.

“NNPC is very open and transparent. We publish our NNPC Monthly Financial and Operations reports in the media. No one does monthly reporting, not even the international oil companies or the publicly quoted companies. The best they do is quarterly reports. But we do monthly reports of revenue (profit and loss for the entire corporation, including the subsidiaries). We do operations report on how much oil and gas was produced, sold and the monetary value; how much products the refineries processed and how much was imported and sold by PPMC. We do all these to defuse the perception of opacity. Yet some people still say we are opaque, and I think that is not fair”, he argued.

Abdulrazak disclosed that as part of the stewardship accounting designed to make NNPC’s operations transparent to the public, the inherited six-year unaudited accounts of the corporation have been audited up to date, stressing that the account for 2017 has been fully audited, approved and forwarded to relevant authorities.

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The post Withdrawal of $1.05bn from NLNG dividend account legal – NNPC appeared first on The Sun Nigeria.

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