NPDC remits $6bn to NNPC account – Briggs

The Nigerian Petroleum Development Company Limited (NPDC) has  said  $6billion was remitted to the Nigerian National Petroleum Corporation, NNPC/NPDC account which warehouses all of NPDC’s revenue earnings from its operations.

 The Managing Director of NPDC,  Mr. Victor Briggs,  who stated this yesterday in a statement, said the reports quoting the company as denying receiving the sum of $6 billion from its parent company, NNPC, being proceeds from NPDC’s oil and gas operations, “are misleading and do not reflect the contents of what was submitted to the Senate Committee on Finance”
 This is as the NNPC yesterday denied entering into any form of oil business with two Swiss oil trading companies, Vitol and Trafigura, to defraud Nigerians  of billions of United States dollars.
Mr. Briggs in the statement said: “For the avoidance of doubt, NPDC in its submission stated that the funding relationship between NNPC and NPDC provides for proceeds from Hydrocarbon sales to be paid into an NNPC/NPDC account. NNPC, as the parent company of NPDC, reviews and approves NPDC’s annual budgets and performance and disburses funds on periodic basis as per the approved work programme that covers both NPDC’s capital and operating expenses.

 “This approach also provides for NNPC to critically monitor and control costs as part of strict financial discipline and make direct payments on behalf of NPDC for royalty and taxes while deducting costs in accordance with the provisions of the Petroleum Profits Tax (PPT) as amended.
“Given the above, it is hereby reiterated that the sum of $6billion was remitted to the above stated NNPC/NPDC account which warehouses all of NPDC’s revenue earnings from its operations. Releases from this account are in turn disbursed into NPDC only accounts for the execution of its operations.
“We, therefore, want to restate that NNPC funds NPDC adequately for the effective conduct of its operations and meets the NPDC’s statutory responsibilities for royalties, taxes and other exactions as necessary”
Meanwhile, NNPC has denied entering into any form of oil business with two Swiss oil trading companies to defraud Nigerians of billions of United States dollars.
The corporation, however, stated that its pricing strategy was aligned to international best practices obtained in the oil industry.
This was the submission made by the Group Managing Director (GMD) of the corporation, Mr. Andrew Yakubu, who gave the testimony at an investigative hearing at the House of Representatives.
The hearing was entitled: “Urgent Need to Investigate Alleged Connivance of Nigerian National Petroleum Corporation (NNPC) with Swiss Oil firms to rob Nigerians Billions of Dollars’’ organised by the House Committees on Petroleum Resources (Upstream and Down Stream) and the Justice.
In his presentation, the GMD said that prices of oil were determined in platts.
He said: ‘’ Honourable Chairman, we affirm that the claims in the “Bernes Declaration” are baseless and without material substance and request you to set it aside in its entirety’’.
While stating that NNPC’s pricing strategy aligned to international best practices in the industry, Yakubu said  oil prices were based on a reference to the bench mark crude Brent whose prices are published in Platts for the international trading community, a premium/differential for individual crude grades.
Yakubu also defended the popular practice of selling crude oil for refined product, saying it was a typical procurement strategy.
‘’The NNPC Act mandates the Corporation to supply petroleum products to the Federation as supplier of last resort. In order to meet this obligation, 445,000 barrels of crude oil is assigned to the Corporation at international price for domestic refining’’, he said.
Earlier declaring the hearing open, Speaker of the House, Hon. Aminu Tambuwal, represented by Hon. Ali Ammed (PDP Kwara), said the country was in such a critical time that revenue losses would be not tolerated.
Also in his speech, Chairman of the Committee, Hon. Muraina Ajibola (APC Lagos), who also chairs the House Committee on Petroleum Resources (Upstream), stated that the Committees’  assignment was to investigate the allegation and make appropriate recommendations to the House in plenary.
Ajibola noted the strategic role revenue from oil plays in the national economy, saying that the Committee would undertake the investigation with every sense of seriousness in order to make appropriate recommendations to the House.

 control costs as part of strict financial discipline and make direct payments on behalf of NPDC for royalty and taxes while deducting costs in accordance with the provisions of the Petroleum Profits Tax (PPT) as amended.
“Given the above, it is hereby reiterated that the sum of $6billion was remitted to the above stated NNPC/NPDC account which warehouses all of NPDC’s revenue earnings from its operations. Releases from this account are in turn disbursed into NPDC only accounts for the execution of its operations.
“We, therefore, want to restate that NNPC funds NPDC adequately for the effective conduct of its operations and meets the NPDC’s statutory responsibilities for royalties, taxes and other exactions as necessary”
Meanwhile, NNPC has denied entering into any form of oil business with two Swiss oil trading companies to defraud Nigerians of billions of United States dollars.
The corporation, however, stated that its pricing strategy was aligned to international best practices obtained in the oil industry.
This was the submission made by the Group Managing Director (GMD) of the corporation, Mr. Andrew Yakubu, who gave the testimony at an investigative hearing at the House of Representatives.
The hearing was entitled: “Urgent Need to Investigate Alleged Connivance of Nigerian National Petroleum Corporation (NNPC) with Swiss Oil firms to rob Nigerians Billions of Dollars’’ organised by the House Committees on Petroleum Resources (Upstream and Down Stream) and the Justice.
In his presentation, the GMD said that prices of oil were determined in platts.
He said: ‘’ Honourable Chairman, we affirm that the claims in the “Bernes Declaration” are baseless and without material substance and request you to set it aside in its entirety’’.
While stating that NNPC’s pricing strategy aligned to international best practices in the industry, Yakubu said  oil prices were based on a reference to the bench mark crude Brent whose prices are published in Platts for the international trading community, a premium/differential for individual crude grades.
Yakubu also defended the popular practice of selling crude oil for refined product, saying it was a typical procurement strategy.
‘’The NNPC Act mandates the Corporation to supply petroleum products to the Federation as supplier of last resort. In order to meet this obligation, 445,000 barrels of crude oil is assigned to the Corporation at international price for domestic refining’’, he said.
Earlier declaring the hearing open, Speaker of the House, Hon. Aminu Tambuwal, represented by Hon. Ali Ammed (PDP Kwara), said the country was in such a critical time that revenue losses would be not tolerated.
Also in his speech, Chairman of the Committee, Hon. Muraina Ajibola (APC Lagos), who also chairs the House Committee on Petroleum Resources (Upstream), stated that the Committees’  assignment was to investigate the allegation and make appropriate recommendations to the House in plenary.
Ajibola noted the strategic role revenue from oil plays in the national economy, saying that the Committee would undertake the investigation with every sense of seriousness in order to make appropriate recommendations to the House.