Re: USA Africa Dialogue Series - POINT-COUNTERPOINT: CBN Sanusi vs. NNPC

Prof., you said;
"..Does this mean, for example, that FIRS and DPR have NEVER remitted these monies before, otherwise the CBN Governor would have known?" My point exactly.
Therefore, I was actually urging for better explanation and answers, by implying, as did many who commented on this, including you, that we expect that the Governor of CBN would know, if the monies, some of which, according to the explanation so far offered by NNPC, are banked at the Apex Bank OR NOT.

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CC: hadizamustapha@hotmail.com; USAAfricaDialogue@googlegroups.com; NaijaPolitics@yahoogroups.com; nigerianID@yahoogroups.com; OmoOdua@yahoogroups.com; naijaintellects@googlegroups.com; Raayiriga@yahoogroups.com; YanArewa@yahoogroups.com; ekitipanupo@yahoogroups.com
From: klalli@aol.com
Subject: Re: USA Africa Dialogue Series - POINT-COUNTERPOINT: CBN Sanusi vs. NNPC
Date: Thu, 12 Dec 2013 08:44:50 -0500
To: usaafricadialogue@googlegroups.com

Definitely something does not add up in all of these. If it is true that much money has not been remitted in an 18-month period, one wonders what the governments have been spending and sharing all that time. And what says the finance minister in all of this?

Lekan Alli.

Sent from my iPad

On Dec 12, 2013, at 4:11 AM, Mobolaji Aluko <alukome@gmail.com> wrote:

Hadiza Mustapha:

This is not about ignorance of one person or the other.  If in fact, some of the money should be accounted for by FIRS and DPR, then only NNPC should not be tasked to account for it.  

NNPC has largely confirmed the CBN Governor's numbers, give or take a few barrels of oil so he has clearly demonstrated knowledge.  It is who is accountable for remittance to the Federation Account (lodged at the CBN) of ALL the money that is in question. One is at a loss as to why it is NNPC that has to point out what appears to be a reasonable information.  Does this mean, for example, that FIRS and DPR have NEVER remitted these monies before, otherwise the CBN Governor would have known?

These are head-shaking questions, because oil money is the blood of Nigeria's economy, and the two biggest institutions getting and managing our money - NNPC and CBN - are at logger-head.  That is the dilemma.

Yes - and there you have it.

Bolaji Aluko

On Thu, Dec 12, 2013 at 3:31 AM, Hadiza Mustapha <hadizamustapha@hotmail.com> wrote:

Prof, one can accuse the CBN Governor of a lot of things, ignorance is not one of them. Just saying, "shaking my head" and "there you have it"..</div>
Sent from my BlackBerry® smartphone

-----Original Message-----
From: Mobolaji Aluko <alukome@gmail.com>
Date: Wed, 11 Dec 2013 23:34:33
To: <USAAfricaDialogue@googlegroups.com>; <NaijaPolitics@yahoogroups.com>; <nigerianID@yahoogroups.com>; <OmoOdua@yahoogroups.com>; <naijaintellects@googlegroups.com>; <Raayiriga@yahoogroups.com>; <YanArewa@yahoogroups.com>; <ekitipanupo@yahoogroups.com>
Subject: Fwd: USA Africa Dialogue Series - POINT-COUNTERPOINT: CBN Sanusi
 vs. NNPC






REVISED.....







QUOTE



 "The 24% of total crude oil revenue receipts which the CBN governor is reported to have acknowledged that NNPC remitted represents the proceeds from the equity lifting which NNPC is directly responsible for. The alleged unremitted 76% was paid to the agencies that are statutorily empowered to receive them for onward remittance into the Federation Account", Dr. Ibrahim explained.
 He stressed the need for institutions of the Federal Government and top government functionaries to seek understanding of issues that are not clear to them from relevant agencies rather than go public with misleading information that is capable of creating public disaffection. He expressed NNPC's availability at all times to meet with all relevant stakeholders to clarify issues.


UNQUOTE




My People:


If the CBN Governor does not know all this time, who else should know?

And okay....so now that we know where the Equity Crude (from NNPC) is, where are the PPT (from FIRS) and Royalty (from DPR) proceeds, assuming that TP and NPDC have the other two proceeds?


Inquiring minds want to know.




Bolaji Aluko




_________________________________________________________________




1.  NNPC failed to remit $49.8bn, Sanusi alleges
2.  $49.8bn: NNPC Refutes Sanusi's Claim






CRUDE OIL LIFTING SALES PROCEEDS




S/N
 CRUDE OIL ITEM
 PAID TO
REMITTED TO
AMOUNT

1
Equity Crude
NNPC
Federation Account with the CBN
???

2
Petroleum Profit Tax
Federal Inland Revenue Service, FIRS
Federation Account with the CBN
???

3
Royalty
Department of Petroleum Resources, DPR
Federation Account with the CBN
???

4
Third Party Financing
Research, Development, Programme and Satellite fields Development
Third Party
???

5
Nigerian Petroleum Development Company, NPDC
NPDC for upstream development
NPDC
???

 
 
 
TOTAL
CBN: 594,024,107 barrels of crude valued at $65,332,350,514.57.   NNPC repatriated $15,528,410,098.77, representing 24 per cent of the value. This means the NNPC is yet to repatriate to the Federation Account, an amount in excess of $49.804bn 
 
NNPC: 618.55million barrels (not 594.024 million).  Amount repatriated by NNPC was only Equity Crude.








PUNCH



 NNPC failed to remit $49.8bn, Sanusi alleges

 DECEMBER 10, 2013 BY AGENCY REPORTER 



An online news medium, SaharaReporters, reported on Monday that the Governor of the Central Bank of Nigeria, Mr. Lamido Sanusi, had accused the Nigerian National Petroleum Corporation of failing to remit $49.8bn (about N8tn) to the Federation Account between 2012 and July this year.
The medium quoted Sanusi as complaining to President Goodluck Jonathan via a letter about the continuing refusal of the NNPC to honour its legal obligations, including failure to remit the said amount, which it said represented 76 per cent of the value of crude oil lifting during the period.
The complaints are contained in the letter to the President dated September 25, 2013.
Sanusi reportedly wrote, "Our analysis of the value of crude oil export proceeds based on the documentation received from pre-shipment inspectors shows that between January 2012 and July 2013, NNPC lifted 594,024,107 barrels of crude valued at $65,332,350,514.57.
"Out of this amount, NNPC repatriated only $15,528,410,098.77, representing 24 per cent of the value. This means the NNPC is yet to account for, and repatriate to the Federation Account, an amount in excess of $49.804bn of the value of oil lifted in the same period."
Drawing attention to an attached table of analysis of the crude oil lifting and repatriations as prepared by the CBN, the governor noted that the failure of the NNPC to repatriate the amounts constituted not only a violation of constitutional provisions but also the country's foreign exchange and pre-shipment inspection of export laws.
Also drawing attention to previous occasion in which he had expressed concern about what appeared to be shortfalls in remittances to the Federation Account in spite of the strong recovery in the price of oil, Sanusi said a point of departure ought to be to insist that the NNPC accounted fully for all proceeds that were diverted from its accounts with the CBN and the Federation Account.
He further wrote, "As an indicator of how bad this situation has become, please note that in 2012 alone, the Federation Account received $28.51bn in petroleum profits and related taxes, but only $10.13bn from crude oil proceeds.
"In the period January-July 2013, the corresponding figures are $16.65bn and $5.39bn, respectively.  This means, Your Excellency, that in the first seven months of the year, taxes accounted for 76 per cent of the total inflow from this sector, while NNPC crude oil proceeds accounted for only 24 per cent."
Sanusi, therefore, recommended to the President to require the NNPC to provide evidence for disposal of all proceeds of crude sales diverted from the CBN and Federation Account; investigate crude oil lifting and swap contracts, as well as the financial transactions of counter-parties for equity, fairness and transparency; and authorise prosecution of suspects in money-laundering transactions, including but not limited to Bureaux de Change, who were unable to account for hundreds of millions of dollars.
When contacted by The PUNCH for the confirmation of the story, the CBN spokesperson, Mr. Ugochukwu Okoroafor, said he was not aware of the said letter, adding that correspondences between the President and the central bank governor were confidential matters between the two of them.



-------------------------------------------------------------------




September 25, 2013



H.E. Dr. Goodluck Ebele Jonathan
President and Commander-in-Chief
Federal Republic of Nigeria
State House
Abuja


Your Excellency,


Subjects:
*Non-Repatriation to the Federation Account by Nigerian National Petroleum Corporation (NNPC) of $49.8 Billion representing 76% of the value of crude oil liftings in 2012 and 2013 
*Failure of NNPC to pay N22billion Nigerian Export Supervision Scheme (NESS) Levy Other Related matters




I am constrained to formally write your Excellency, documenting serious concerns of the Central Bank of Nigeria (CBN) on the continued failure of the Nigerian National Petroleum Corporation (NNPC) to repatriate significant proportions of the proceeds of crude oil shipments it made in gross violation of the law. Sources of Federation Account Revenues include proceeds from Export of Nigeria's crude oil by the NNPC, Petroleum Profits Taxes, and Penalties for gas flaring, oil exploration licenses and concession block allocations, etc.


Our analysis of the value of crude oil export proceeds based on the documentation received from pre-shipment inspectors shows that between January 2012 and July 2014 NNPC lifted 594,024,107 barrels of crude valued at $65,332,350,514.57. Out of this amount, NNPC repatriated only $15,528,410,098.77 representing 24% of the value. This means the NNPC is yet to account for, and repatriate to the Federation Account, an amount in excess of $49.804 billion or 76% of the value of oil lifted in the same period.


Your Excellency, I have attached as an appendix, a table giving the analysis of the crude oil lifting and repatriations as prepared by staff of Trade Exchange and Banking Payments System Departments of the CBN based on the firm documentation in their possession. The failure of NNPC to repatriate these amounts constitutes not only a violation of constitutional provisions but also of both the Foreign Exchange (Monitoring and Miscellaneous Provisions) Act No. 17 of 1995 and the Pre-Shipment Inspection of Exports Act No. 10 of 1996 which stipulates that "An exporter of goods, including petroleum products, shall open, maintain and operate a foreign currency domiciliary account in Nigeria into which shall be paid all exports proceeds corresponding to the entire proceeds of the exports concerned".


Your Excellency, you will recall that as far back as late 2010, I had verbally expressed deep concern about what appeared to be huge shortfalls in remittances to the Federation Account in spite of the strong recovery in oil price. At a recent NEMT meeting in the Presidency, I also expressed a strong view that while Government needs to continue its effort to combat oil thieves, vandals and illegal refineries in the Niger-Delta, the major problem is transactions taking place under legal cover with huge revenue leakages embedded therein.


Your Excellency, it is my respectful view that a place to begin is to insist on NNPC to account fully for all proceeds that were diverted away from its accounts with the CBN and the Federation Account. There are also other lines of inquiry which your Excellency may wish to authorize and pursue. 
These include;


*A thorough audit of activity on any domiciliary accounts held by NNPC outside of the CBN. This is because the CBN has no record of either the dollar proceeds of these diverted sales or the naira equivalent being transferred to the Federation Account.
*An examination of banking records of companies involved in Oil lifting and swap deals, including audit trails of regular payments to third-parties; 
*An independent review of the terms and condition of Oil lifting and swap contracts for fairness and equity and transparency; Investigation and prosecution of Bureau de change (BDC) that have purchased hundreds of millions of dollars from the inter-bank market and are unable to account for these monies. We have compiled a list of these companies with recommendations for prosecution under Anti-money Laundering Laws; 
*Investigation of obvious avenues for money laundering, such as companies that sell private jets to Nigerians. The Central Bank stands ready to render full assistance and provide as much data as possible to assist these inquiries.


Your Excellency, as an indicator of how bad this situation has become, please note that in 2012 alone, the Federation Account received $28.51billion in Petroleum Profits and related taxes but only $10.13billion from crude oil proceeds. In the period January-July 2013 the corresponding figures are $16.65 billion and $5.39 billion, respectively. This means, Your Excellency, that in the first seven months of the year, taxes accounted for 76% of the total inflow from this sector, while NNPC crude oil proceeds, accounted for only 24%.


You will also note, Your Excellency, that NNPC liftings amounted to 64% of total oil liftings from Nigeria during the reference period, and yet its remittance represented only one-third of the taxes paid by the oil companies that exported the balance of 54%.


Finally, your Excellency, we would like to report that NNPC has failed to keep up with payments of its levies under Nigerian Export Supervision Scheme (NESS) in line with this law, and currently owes the Federal Government N22 billion.


As banker to the Federal Government and Economic adviser to the President, I am obliged to draw the President's attention to these serious issues of which you have most probably never been aware in this detail.


To sumamarise, my recommendations are to respectfully advise the President to:


Require NNPC to provide evidence for disposal of all proceeds of crude sales diverted from the CBN and the Federation Account; Investigate crude oil lifting and swap contracts, as well as the financial transactions of counter-parties for equity, fairness and transparency; and Authorise prosecution of suspects in money-laundering transactions, including but not limited to BDCs who are unable to account for hundreds of millions of dollars. I trust your Excellency will find the content of this letter useful and hereby reaffirm the support of Central Bank of Nigeria for your Government's transformation agenda and effort to serve the Nigerian people.


While thanking you for your consideration, please accept, Mr. President, the renewed assurances of my highest regards.


Yours Sincerely,
Mallam Sanusi Lamido Sanusi (CON) Governor, Central Bank Of Nigeria

 <http://www.nigerianmuse.com/wp-content/uploads/2013/12/CBN_report_oil_revenue_July_2013.jpg>

_____________________________________________________________




African Examiner



 $49.8bn: NNPC Refutes Sanusi's Claim



Wednesday, December 11th, 2013



The Nigerian National Petroleum Corporation (NNPC) has refuted reports credited to the Governor of the Central Bank of Nigeria, Mallam Sanusi Lamido Sanusi, alleging that it withheld the sum of $49.8bn representing 76% of the total crude oil revenues from January 2012 to July 2013.




 In a statement signed by the General Manager, Media Relations Department of the NNPC, Dr. Omar Farouk Ibrahim, and made available to the press, the Corporation clarified that the allegation is borne out of misunderstanding of the workings of the oil and gas industry and the modality for remitting crude oil sales revenue into the Federation Account.
 "For the avoidance of doubt, it needs to be stated that the figure of 594.024 million barrels of crude oil given by the CBN as the total crude oil lifting for the period of January 2012 to July 2013 does not represent the correct picture of crude oil lifting for the period. From our records, the correct figure is 618.55m barrels. This shows that the CBN understated the actual crude lifting by 4.13%," Dr. Ibrahim stated.
 He explained that revenue from crude oil liftings are in various categories, namely Equity Crude; Petroleum Profit Tax, Royalty, Third Party Financing and the Nigerian Petroleum Development Company, NPDC. Revenues from each of these categories are statutorily collected by different agencies of the government. The NNPC collects only one of the aforementioned categories, namely Equity Crude. Petroleum Profit Tax is collected by the Federal Inland Revenue Service, FIRS, Royalty goes to the Department of Petroleum Resources, DPR, Third Party financing goes for Research, Development, Program and Satellite fields Development, while NPDC goes to NPDC for upstream development.
 While NNPC pays proceeds from Equity crude directly to the Federation Account with the CBN, the FIRS and DPR pay PPT and Royalty respectively into the Federation Account with the CBN. The sum total of these proceeds make up the alleged unremitted revenues, Dr. Ibrahim stated.
 "The 24% of total crude oil revenue receipts which the CBN governor is reported to have acknowledged that NNPC remitted represents the proceeds from the equity lifting which NNPC is directly responsible for. The alleged unremitted 76% was paid to the agencies that are statutorily empowered to receive them for onward remittance into the Federation Account", Dr. Ibrahim explained.
 He stressed the need for institutions of the Federal Government and top government functionaries to seek understanding of issues that are not clear to them from relevant agencies rather than go public with misleading information that is capable of creating public disaffection. He expressed NNPC's availability at all times to meet with all relevant stakeholders to clarify issues.
 Dr. Omar Farouk Ibrahim
 General Manager, Media Relations Dept. NNPC Abuja.
 10th December, 2013
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