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HomeBusinessNigeria moves to probe NNPC over management of NLNG $275 mln dividends...

Nigeria moves to probe NNPC over management of NLNG $275 mln dividends payout

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The Federation Account Allocation Committee (FAAC) has launched a comprehensive investigation into the utilization of dividends derived from Nigerian Liquified Natural Gas (NLNG) by the Nigerian National Petroleum Corporation Limited (NNPCL).

NLNG, a prominent Nigerian natural gas enterprise operating in the liquefied natural gas sector, has come under scrutiny as FAAC seeks to ascertain the proper allocation and disbursement of these funds.

An ad hoc committee has been constituted to review and meticulously compare the amounts designated for subsidies, taxes, royalties, and other payments with the actual sums received or disbursed thus far.

This thorough examination aims to shed light on any discrepancies and ensure transparency and accountability in the management of these vital financial resources.

According to the FAAC post-mortem subcommittee’s August report, a substantial sum of $275 million has accrued as dividends from NLNG operations. NNPCL has reported that out of this total, $220 million was allocated to service the nation’s debt related to subsidies, accounting for 80 percent of the dividend.

However, a significant concern arises from the remaining $55 million, constituting 20 percent, which was withheld by NNPCL and not remitted to the nation’s coffers. This withholding has raised constitutional concerns and prompted FAAC to launch an inquiry into this matter.

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The Ad-hoc Committee’s inaugural meeting took place on July 26th, during which the terms of reference were deliberated. Subsequently, the Sub-Committee formally approached NNPCL, requesting a detailed breakdown of dividends accrued from NLNG operations since inception.

The Sub-Committee is currently awaiting NNPCL’s response to provide further insights into this financial inquiry.

In a related development, data from July revealed that NNPC Production Sharing Contracts (PSC) crude oil lifting stood at 1.45 million barrels for both export and domestic consumption, marking a 9.02 percent increase from the previous month’s 1.33 million barrels.

Under the PSC Profit Crude and Gas Receipt and Distribution framework, crude oil export revenue for July amounted to $17.75 million. Additionally, the sum of N65.53 billion represented the domestic PSC crude oil and gas receipts for the same month.

A noteworthy allocation, the Federation Share, equivalent to 40 percent of PSC profits and totaling $7.10 million and N26.21 billion, was remitted to the Federation Account and subsequently disbursed in August.

As the investigation into NLNG dividends unfolds, FAAC remains committed to ensuring financial probity and adherence to constitutional principles in the management of Nigeria’s vital economic resources.

(Edited by Oludare Mayowa; omayowa@globalfinancialdigest.com; Newsroom: +234 8033 964 138)

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