Adio was speaking at his presentation on the NEITI 2013 audit report at the senate chamber on Wednesday.
He explained that the lack of accurate information on the actual quantity of crude oil Nigeria produces was compounded by the absence of a proper metering system.
“In 2013, the country produced 800.3 million barrels and out of that the country made $58.07 bn and that represents an eight percent reduction on the $62.9bn that the country made in 2012,” he said.
“The second issue is that there are some monies that were withheld, lost or underpaid for different reasons.
“These monies are in three tranches. The first is in the category of the unremitted, and the unremitted amounted to $3.8bn and N358m.
“The second category is the category of losses, because of some inefficient practices and theft among other things, the country lost $5.9bn and N20bn.
“Under the category of the under-assessed the country lost $599.8m.”
He said the unremitted $1.7bn is still being owed the federation for OMLS.
“Also, $1.29 bn from the NLNG dividends and N351bn from unpaid domestic crude debt, N2.17bn from cash calls refunds,” he said, adding that those are the monies “we have established that should have been paid to the federation and were not paid”.
“The second category of losses by NNPC and its subsidiaries. Out of the $5.9bn, N4.7 bn was lost to theft and vandalism,” Adio said.
“N20bn was lost because the NNPC did not observe the 90 days credit grace and when you look at the time value of money, if you calculate at 12 percent interest the country lost N20bn.
“Some of the issues in the report. The first is about the assets divested by NNPC to NPDC. NNPC between 2010 and 2011 divested eight assets that belong to the federation to its upstream subsidiary NPDC. So NNPC divested 55 percent of the shares being held on behalf of the federation to the NPDC.
“These eight OMLS are valued at $1.8bn by DPR. NPDC paid only $100m out of the $1.8bn meaning there is an outstanding of $1.7 bn, and even that $100m was paid two years after.
“What this means is that NNPC lifted oil on behalf of NPDC not on behalf the federation despite the fact that NPDC has not fully paid for those assets.
“Another issue that came out of the audit is the NLNG dividend. NLNG in 2013 paid $1.28 bn, but the money was not remitted to the federation account.
“Beyond this between 2005 and 2013 NLNG paid $12.9bn to NNPC and NNPC acknowledged receiving it, but the money was not remitted to the federation account.
“Another is the losses incurred from swap and OPA. This is the arrangement where NNPC exchanges crude for product and the country lost $518m due to the inefficiency of the swap and OPA.
“$211m was lost to product swap and $306m was lost to OPA.
“N1.3trn was posted for petroleum subsidy in 2013. It was 30 percent higher than the total for budget education, health, water and SURE-P.
“We found out that we have infrastructural deficit- the country can only say what it exports and cannot say authoritatively what it produces.
“This has always been an issue and the audit confirms that we still don’t have meters where we should have them.
“This lack of metering has serious implication for revenue and national security.” Click to signup for FREE news updates, latest information and hottest gists everyday
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