The Nigerian National Petroleum Cooperation has commenced
the process of recovering over $7bn (N1.4tn) in over-deducted tax benefits from
joint venture partners on major capital projects.
It was learnt on Sunday that the corporation had also
engaged an international accounting firm to ascertain the exact amount due to
government on the Strategic Alliance Contracts entered by Nigerian Petroleum
Development Company, where up to $2.46bn (N484.6bn) of government money would
be recovered.
In a report submitted to President Muhammadu Buhari by its
new management, detailing the corporation’s successes so far, the Group
Managing Director of the NNPC, Dr. Ibe Kachikwu, stated that the firm had
commenced its performance measurement and benchmarking.
He added that the corporation had started what it described
as value for money review of the NNPC and the JV companies covering the period
of 2008 to 2013.
The Senior Special Assistant to President Buhari on Media
and Publicity, Mr. Garba Shehu, in a statement on Sunday, disclosed that the
NNPC report indicated that the new measures might lead to further cost recovery
for the firm.
The report, according to Shehu, also revealed that after an
extensive investigation of the various toxic crude oil for refined products
swap contracts, a total sum of $420m had so far been reconciled in favour of
the NNPC and was now due for recovery from the legacy OPA/SWAP contracts.
“Out of the reconciled amount, the sum of $277m has been
recovered in lieu of products and the recovery effort is still ongoing,” the
statement added.
According to the report, the NNPC GMD stated that he was
committed to the continued review of all existing contracts and addressing
those that were not favourable to the corporation.
It noted that significant cost reductions were also expected
to ensure that the corporation remained profitable in the prevailing low crude
oil price regime.
The NNPC upstream operations are in joint partnerships with
major oil companies. These multi-national exploration and production companies
are operating predominantly in the onshore Niger Delta, coastal offshore areas
and lately in the deep waters.
As with many other developing countries, the multinationals
in Nigeria have been operating under what is called a concession system, with
the NNPC being the concessionaire, while the companies are the operators.
The NNPC also is responsible for the management of the
exploration bidding rounds for oil and gas. The multinational oil companies
operate in partnership with the corporation under Production Sharing Contracts.
The statement from the Presidency on Sunday did not name the
joint venture partners from which the corporation plans to get the funds.
Some of the international oil companies that are JV partners
of the NNPC include Shell, Agip, Mobil, Chevron and Texaco.
Kachikwu, in the statement from the Presidency, said
progress was being made towards bringing back the nation’s refineries to full
production, noting that the management of the NNPC was working to actualise
this before the end of 2015.
The report noted that if the refineries were completed as
scheduled, it would help Nigeria save about $1bn worth of foreign exchange from
fuel import substitution annually.
It said additional total savings of over $500m would be made
from the petrochemical products of the Kaduna Refinery and Petrochemical
Company annually.
The report also disclosed that efforts at repositioning the
NNPC had started yielding result to the nation’s economy.
For instance, it stated that gas supply to the power plants
had improved significantly from about 630 million to 861 million standard cubic
feet per day, which had resulted in a more steady power supply.
“Indeed, the report revealed that gas supply for power and
peak generation have in recent times reached a historical high of 876 million
standard cubic feet per day and 4,782 megawatts, respectively,” the statement
added.
Copyright PUNCH.
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