The House of Representatives Ad-hoc Committee investigating revenue leakages in the oil and gas sector from January 2016 to January, 2017 was stunned that the Central Bank of Nigeria, CBN, converted to naira the rate royalties paid in dollars before remittance into the federation account.
It was observed that the CBN has been converting dollar remittances, using about N167 to $1, instead of the current N305.
The committee had sought clarification on the disparities observed in the receipts of remittances submitted by IOCs as issued by the DPR, said some of the receipts made available to the panel, the remitted amount (in naira) into the federation account fell short of its dollar value, using current exchange rates.
Mrs. Folasade Odunuga, Head, Planning of DPR, while interfacing with the ad-hoc committee, led by Jarigbe Agom Jarigbe (PDP, Cross River), told the committee that “royalties on crude oil are paid strictly in dollars directly into the federation account in JP Morgan, managed by the CBN”.
The law makers probed as to why this should happen under the supervision of the DPR.
This prompted the lawmakers to ask questions invoice was based on what currency it was paid in.
Odunagu explained that there were other royalties that came in both naira and dollars, adding that payment further on the invoices showing DPR converting dollars into naira before remitting to government accounts, but the DPR officials denied, saying that such is never done, since the agency didn’t handle cash directly.
She said: “Receipts are always written after we get our statement of account from the CBN. We do not receive any money nor have any interface with any payment. All payments are made directly to the federation account. It’s their obligation to pay before we evaluate because the law allows them to pay within 90 days.”
On why the regulator has not been able to liquidate over $158 million owed by IOCs from 2000 to 2015, Odunuga said IOCs which were indebted to government had been adamant as to the amount they should remit.
She explained that while the IOCs have insisted that what they owed was less than what DPR evaluated, the worst debtor in the industry was the NPDC, which is the exploration arm of the NNPC, urging the panel to ask the corporation why it’s subsidiary has refused to pay royalties to government.
“We may be children of same father and different mother, and it’s what our father instructs that we should do, and in this case, everybody is expected to pay what’s due to the father, but some are not doing that, so we need the House to ask why,” Odunuga said.
She noted that no company has achieved hundred percent gas re-injection, adding that the department had evidence and records from the field showing that Exxon Mobil had been selling gas.
The DPR Planner frowned at National Petroleum Development Company, NPDC, a subsidiary of Nigeria National Petroleum Corporation, NNPC, described as the worst debtor in the oil and gas industry, urging the panel to find out why NPDC has refused to pay royalties on its crude production activities.
On why they don’t doubt whatever the CBN gave to them, and asked if it had never occurred to the DPR that the Federal Government was being shortchanged by what the CBN allegedly disclosed as paid in naira component, DPR Director, Mordecai Baba Ladan, said: “We’ve had a good working relationship with the CBN over the years and we’ve not had any iota of doubt that what the CBN gave to us was inaccurate.
”So, to say that we go and do independent investigation as to the facts given to us by the CBN has never crossed our minds.”
Also asked to confirm the assertion by Exxon Mobil that it had been re-injecting its gas and, therefore, couldn’t pay royalty on gas sales, the DPR technical officer informed the panel that it was a lie.
