NNPC: How Part of $12.9bn NLNG Dividend Was Spent

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hamtech
Posts: 31
Joined: Sun May 01, 2016 3:56 pm

NNPC: How Part of $12.9bn NLNG Dividend Was Spent

Post by hamtech » Wed Jun 15, 2016 7:53 am

• Says balance now with CBN, DPR to revalue oil blocks assigned to NPDC
• EIA: Nigeria may add surplus oil in 2017
• FG will ensure lasting peace in N’Delta, says Kachikwu

Ejiofor Alike in Lagos, Chineme Okafor in Abuja and Emmanuel Addeh in Yenagoa with agency report

The Nigerian National Petroleum Corporation (NNPC) on Tuesday finally provided clarification on how part of the $12.9 billion dividends it received from the Nigeria Liquefied Natural Gas (NLNG) Company Ltd over an eight-year period on behalf of the federation was spent.

The corporation also said the balance of the dividend has been moved to the Central Bank of Nigeria (CBN), adding that it was no longer housing the money in line with the federal government’s directive on the Treasury Single Account (TSA).

NNPC stated in Abuja when the Nigeria Extractive Industries Transparency Initiative (NEITI) convened a stakeholders’ dialogue on the 2013 audit report of activities in Nigeria’s oil and gas industry, that it took and ploughed back part of the dividends to the new trains that were built by the NLNG.

It equally listed BrassLNG and OlokolaLNG projects, as well as other gas projects it did not mention, as beneficiaries of the dividend payouts.
BrassLNG and OlokolaLNG projects have not taken off as no final investment decision (FID) has been taken on either of the projects by their shareholders.

NNPC explained that the reinvestment in NLNG was part of its equity contribution to the cost of expanding the company’s trains. NLNG currently has six trains producing 22 million tonnes per annum (MTPA) of LNG.
Construction of a seventh train to complement the existing six-train structure is however expected and this will increase its total production capacity to 30MTPA.

NEITI had in the 2013 audit report it released last month, stated that while NLNG paid dividends meant for the federation to NNPC, the corporation never remitted same to the government over an eight0year period. It said the total dividends since 2005 amounted to $12.9 billion.

But responding to this on the sidelines of the meeting, NNPC’s Group General Manager, Debt Management, Mr. Godwin Okonkwo told journalists that the corporation had not committed any illegality in the management of the funds.
He said: “Before now, the position was that NLNG belongs to the federal government and NNPC was an arm of the federal government. NLNG dividends are there and if there was any kobo that went out of it, it was done with the approval of the federal government.

“No kobo leaves NLNG dividends without appropriate approval. Part of the spending for NLNG dividends was the development of NLNG trains, BrassLNG and OlokolaLNG and it is not right for anybody to say the money is now missing.”
He further stated: “And with the current regime who says NLNG belongs to the federation, the balance of NLNG money has been moved over to the CBN. The money is not with the NNPC.
“Any amount removed from the funds was done with appropriate approval; like funding of the trains for NLNG, the Brass and Olokola LNG projects and other gas-related projects.

“The balance of that we transferred to the TSA with the CBN. Nothing leaves there without appropriate approval. NNPC is not a disorganised place where people do things anyhow.”
Okonkwo who also made efforts to justify the transfer of oil blocks to the Nigerian Petroleum Development Company (NPDC), a transaction the NEITI flagged off as not following due process, explained that the objective for the assignment was well intended.

He said the Department of Petroleum Resources (DPR) has however taken up the asset assignment and would now evaluate its appropriate value to determine if the federation was owed monies as suggested by the NEITI and other audit reports.

“NPDC is being reorganised into asset management teams to ensure that it starts afresh to operate better than its peers in the industry and begins to make money, not only for NNPC, but to put NNPC in the position to declare dividends payable to the federation.

“The objective of the assignment was well intended. The DPR is evaluating what should be paid to the federation as the appropriate value for the assigned blocks,” he added.
He also admitted that the NPDC had made mistakes in the past with some of its operations, but that those mistakes were being corrected by the present leadership of the NNPC.

In another development, the International Energy Agency (IEA) has said that unplanned crude oil production outages by Organisation of Petroleum Exporting Countries (OPEC), particularly Nigeria and Libya, as well as non-OPEC countries, coupled with robust demand from emerging economies, have contributed to balancing the oil market in 2016.
In its Oil Market Report (OMR) for June released yesterday, IEA, a Paris-based energy advisor for over 26 industrialised countries, however added that the present equilibrium in the oil market will tilt into surplus if Nigeria resolves the security issues in the Niger Delta and ramps up production in 2017.

The report said outages in OPEC and non-OPEC countries cut global oil supply by nearly 800,000 barrels per day in May.
According to the agency, at the present global output of 95.4 million barrels per day, production stood 590,000 bpd below a year earlier – the first significant drop since early 2013.
This development stemmed from spending cuts by producing companies and outages, which reduced non-OPEC production by 1.3 million bpd from a year earlier.

According to the agency, having fallen by 900,000 bpd in 2016, non-OPEC supply growth is expected to rise by 200,000 bpd in 2017, lifting output to 57 million bpd.

The report added that non-OPEC supply growth is expected to return in 2017 at a modest 200,000 barrels per day, after declining by 900,000 bpd in 2016.
“The only other substantial increase from OPEC in 2017 could be from Nigeria, should security issues in the Niger Delta be resolved,” said the report.

“At halfway in 2016, the oil market looks to be balancing; but we must not forget that there are large volumes of shut-in production, mainly in Nigeria and Libya that could return to the market and the strong start for oil demand growth seen this year might not be maintained,” the agency said.

“We must stress that this is our first look at 2017 and the huge number of moving parts will see us amend our numbers accordingly. However … the direction of travel seems to be clear,” the IEA added.
“Iran has clearly emerged as OPEC’s fastest source of supply growth this year, with an anticipated annual gain of nearly 700,000 bpd,” IEA said.

IEA predicted that the demand growth in 2017 is likely to reach 1.3 million barrels per day, stressing that the most of the anticipated demand growth this year and in 2017 is expected to come from nations that are not part of the Organisation for Economic Cooperation and Development (OECD).

“Global oil demand growth in the first quarter of 2016 has been revised upwards to 1.6 million bpd and for 2016 growth will now be 1.3 million bpd. In 2017 we will see the same rate of growth and global demand will reach 97.4 million bpd. Non-OECD nations will provide most of the expected gains in both years.

“The growth rate is slightly above the previous trend, mostly due to relatively low crude oil prices. Commercial inventories in the OECD increased from March levels by 14.4 million barrels to stand at 3,065 million barrels by end-April, an impressive 222 million barrels above one year earlier.

“As the US driving season kicks off, OECD gasoline stocks stand above average levels and last year in absolute and days of forward demand terms. There is a similar picture in China,’ the report added.
Meanwhile, the Federal Government yesterday assured the people of the Niger Delta that it would ensure that the ongoing efforts aimed at addressing the crisis in the region would last.

The government noted that the issue of insecurity in the region was being handled with all the seriousness it deserves, stressing that the measures were not cosmetic but intended to achieve enduring peace and stability in the area.
A statement by the Chief Press Secretary to Governor Seriake Dickson, Mr. Daniel Iworiso-Markson, quoted the Minister of State for Petroleum Resources and Group Managing Director of the Nigerian National Petroleum Corporation (NNPC), Dr. Ibe Kachikwu, as making the commitment during a visit to the governor.
Iworiso-Markson said that the minister was accompanied on the visit to the governor by the Special Adviser to the President and Coordinator of the Presidential Amnesty Programme, Gen. Paul Boroh (rtd).

According to the statement, Kachikwu said the federal government was committed to “a financially-driven and economically motivated pattern” of resolving security concerns and development in Bayelsa and the entire region.
The minister appealed to the Niger Delta agitators to embrace dialogue for the common good of all stakeholders, noting that oil as a God-given resource was endowed in the region to unify the people of the country.

Also speaking, Boroh described the ongoing peace initiative as all-encompassing, adding that it was designed to engage all stakeholders, including fishermen in the creeks in terms of information gathering and dissemination towards achieving “a seamless and peaceful Niger Delta”.

Dickson, Iworiso-Markson said, commended the federal government for its approach in building consensus towards proffering lasting solutions to ending insecurity in the Niger Delta.
He stated that the there were “no military wars to be fought in any community in the Niger Delta with armoured tanks and bullets but that of development, peace and prosperity”.

“But there are wars to be fought nevertheless. Those wars are wars of development, peace and stability and prosperity. Wars to conquer and reverse the degradation that has been done to our environment,” Dickson was quoted as saying.
While noting that the challenges call for collaborative efforts, Dickson who called on the multinational oil companies to establish their corporate offices in Bayelsa State, said the move would assist in boosting the local economy through the payment of appropriate taxes and levies.

He lent his voice to the call on the Niger Delta agitators, community leaders and other stakeholders to embrace peace across the region, stressing that the people have a responsibility to ensure that the current peace initiatives succeed.

http://www.thisdaylive.com/index.php/20 ... was-spent/

vanes
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Joined: Sun Jul 29, 2018 8:34 am

Re: NNPC: How Part of $12.9bn NLNG Dividend Was Spent

Post by vanes » Sat Oct 06, 2018 10:05 am

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