NNPC’s Secret Cash Reserves Discovered

The National Assembly on Tuesday was told that the Nigerian National Petroleum Corporation (NNPC) had overspent its revenue of N2.36trillion between January and September 2012 by N48bn, even as the Senate discovered that the corporation has been operating a secret cash reserve, from which it withdraws to top up funds approved for it by the National Assembly.

This was disclosed by the Chief Strategist of the NNPC, Mr Tim Okon, when he appeared before the Joint National Assembly Committee on Petroleum led by Senator Magnus Abe of Rivers South-East. He said the projected revenue for January to September 2012 was N4.02trillion.

Okon disclosed that the total annual revenue is expected to be N3.23trillion, and that the 2012 plan included that the three refineries refine 44million barrels of crude. In the end, only 23million out of a total allocation of N162million barrels were refined.

The parliamentary committee was alarmed at the excess expenditure by the state-owned oil company and it ordered it tp supply full details of their income and expenditure to ascertain how they went overboard with their spending.

They also said that the documents presented for the 2012 performance were not specific as they could notice irregularities between what the corporation earned as income and its operational expenditure for the year was.

The committee had no choice but to reject the budget presentation of the NNPC, as its management could not convince them. They described the budget presentation as a ‘malicious  attempt to deceive and confuse Nigerians’.

Chairman of the committee, Senator Magnus Abe who demanded further details of the revenue profile and expenditure made in 2012, said,  “We cannot go on to consider the 2013 budget unless we understand how you arrived at the total figures. Tell us what are the sources of the revenues and how the monies were spent.”

Another member, Senator Hosea Agboola (PDP-Oyo North) who is also the Senate Deputy Chief Whip, said that what was presented could not be called a budget as it lacked details of income and expenditure.

When Senator Benedict Ayade (PDP – Cross River North) drew the attention of the committee to the discrepancy between the income and expenditure profiles of the corporation, the committee chairman then queried the corporation on where it got the extra money to spend.

In NNPC’s defence, Okon said that the NNPC as a running business operated cash reserves, even as he said that what was presented was not an audited account of the NNPC, and as such, a budget deficit could not be  definitely said to exist.

Another NNPC executive, its Group Executive Director, Refining and Petrochemicals, Mr Philip Chukwu, explained the source of the extra money that made up the corporation’s expenditure as proceeds from the oil production activities of the corporation, which also funds the work in the refineries which are now the profit-earning arms of the corporation.

However, Senator Abe and his committee members disagreed with Chukwu’s position, pointing out to him that the NNPC holds its reserves in crude oil and not in cash. He added that there could not be any transparent consideration of its budget based on that presentation.

Abe told the NNPC management that the National Assembly has the powers in line with Section 162 of the Constitution, to appropriate funds for the NNPC, said the corporation should return to the committee with details of its budget as well as the details of the “reserves.”

The Herald NG

The Herald NG is a leading newspaper in Nigeria at the forefront of the digital revolution.

1 Comment

Leave a Reply

The Heraldng

Stay in touch with us on your social networks and never again miss out on any updates.

FOLLOW US ON