Reps to investigate NNPC’s $2.26bn debt

On Monday, the House of Representatives‘ Public Accounts Committee established two subcommittees to determine how much the Nigerian National Petroleum Company Limited and other oil and gas companies owe the Federation Account.

The committees are also expected to analyse the Nigerian Upstream Petroleum Regulatory Commission’s Remitta records.

The two sub-committees are to be chaired by Jeremiah Umaru, and Olusola Fatoba, from Nasarawa and Ekiti States respectively.

PAC made the decision over the issue raised in the Auditor-General 2021 report on the consolidated financial Statement against the NUPRC.

The report raised three queries against the commission.

The issues include, “Outstanding royalties due from NNPC-COMF MCA/PSC totalling $253,952,693.07, unjustified deductions from joint venture royalty by NNPC before remitting to Department of Petroleum Resources (now NUPRC) totalling $204,853,744,047.39.

“Outstanding royalties on oil, gas, concession rentals and gas flared payable by operators to Federation Account totalling $2,260,448,992.45 and N48,216,163,192.67, among other.”

The Chief Executive Officer of NUPRC, Gbenga Komolafe while responding to the issue of outstanding royalties, said the outstanding revenue due from NNPCL as of Dec31, 2021 has been paid to the tune of $224.3m, leaving a balance of $29.6m still outstanding.

“NUPRC has sent a series of demand notices to the NNPCL to clear the outstanding debt and even reported them to the Honourable Minister of Finance to intervene but to no avail.

“The NUPRC has a revenue collection strategy which includes sanctions and invocation of fine and penalty sections of PIA 2021,” he stated.

While explaining the limitations of the NUPRC in applying necessary sanctions against the NNPCL and other licensees in the oil and gas sector, the NUPRC Managing Director said the agency was aware of the volatility of the industry as well as Nigeria’s economic dependence on oil revenue to avoid negative impact.

He, however, assured the committee that the agency will always operate within the law and uphold the best corporate governance policies.

Members of the committee demanded proof from the NUPRC that the various sums of monies alleged by the Auditor General of the Federation as uncollected revenue from the NNPCL and major oil and gas operators have been recovered since the end of the 2021 financial year.

Earlier in his remarks, the Chairman of the Public Accounts Committee, Bamidele Salam, assured all parties involved in the hearings of fairness and openness in considering all queries by the Auditor General as well as other issues before it.

Salam said as a committee that sits in an investigative capacity, it would not pronounce anyone guilty without providing ample opportunity for defence through an open hearing.

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