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NNPC says collaborating with NEITI to reconcile financial records amid allegations of indebtedness

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The Nigerian National Petroleum Company Limited (NNPC Ltd.) is actively engaging with the Nigeria Extractive Industries Transparency Initiative (NEITI) and a Reconciliation Committee established by President Bola Ahmed Tinubu.

The purpose of this collaboration is to investigate, review, and reconcile financial records concerning the alleged indebtedness of both NNPC Ltd. and the Federation Accounts Allocation Committee (FAAC) to the Federation.

This initiative follows calls by a non-governmental organisation for an inquiry into multiple claims of indebtedness owed to the Federation by the national oil company.

NNPC Ltd. has underscored that these allegations lack merit, particularly considering NEITI’s prior dismissal of many claims presented in its 2021 report, following a series of consultations with NNPC Ltd.

NNPC Ltd. has clarified that during the commencement of President Bola Ahmed Tinubu’s administration, it was mandated to sell Premium Motor Spirit (PMS) at one-third of its actual value, incurring an average monthly subsidy bill of approximately N400 billion. This financial burden strained the company’s revenue and finances.

According to the Chief Corporate Communications Officer of NNPC Ltd., Olufemi O. Soneye, this subsidy bill had accrued to a substantial N3.736 trillion by May 31st, 2023.

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Additionally, in the realm of gas-to-power debts, NNPC Ltd.’s share of unpaid upstream joint venture gas deliveries to government-owned plants resulted in an accumulated debt of N174.07 billion for the Federation.

Moreover, receivables owed by the Federation to NNPC Exploration & Production Limited (NEPL) amounted to $712 million, equivalent to N309.07 billion at an exchange rate of N434.08/US$1.

These funds were revenue that had not been remitted to NEPL but instead deposited into the Federation account.

While the Federation held a net indebtedness of N4.207 trillion to NNPC Ltd., the company itself carried an indebtedness of N2.852 trillion, mainly attributed to outstanding good and valuable consideration (GVC) in connection with government upstream divestments, royalties, and petroleum profit taxes (PPT).

NNPC Ltd. has maintained a cooperative relationship with NEITI over the years, exemplified by its adoption of EITI’s supporting company expectations in August 2020, aligning with global ethics and standards.

Furthermore, during the United Nations General Assembly (UNGA) in New York, NNPC Ltd. signed the United Nations Global Compact, thereby becoming the first state-owned oil company to join this global initiative and affirming its commitment to human rights, labour standards, environmental sustainability, and anti-corruption measures.

NNPC Ltd. remains dedicated to delivering value to Nigerians through principles of transparency, accountability, and performance excellence (TAPE), under the leadership of Mele Kyari.”

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

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