NNPC targets N13.266trn revenue by 2023

Nigerian National Petroleum Corporation (NNPC), on Wednesday, presented N13.266 trillion as its 2021-2023 Medium Term Expenditure Framework (MTEF) and Fiscal Strategy Paper (FSP) to the House of Representatives joint Committee on Appropriations, Finance, Aids, Loans & Debt Management and National Planning.

The details of the three-year revenue projections showed that the sum of N3.54 trillion is for 2021, N4.385 trillion is for 2022 while the sum of N5.341 trillion is for 2023 respectively.

While responding to various questions posed by the lawmakers, NNPC’s Chief Finance Officer, Mr Umar Ajiya, Chief Finance Officer (CFO), explained that the Corporation’s “performance over the years is as a result of volume, price and cost. In recent time, we have been working closely with the Revenue Mobilisation, the office of the Accountant General of the Federation, DPR, Federal Inland Revenue, Nigeria Governors Forum and others almost on a monthly basis.

“The Budget Office is our primary partner in setting up the budget appropriation document. What we have realized over the years is that to the extent that we are OPEC members, our ability to produce and sell is curtailed. For example, we almost got to 2.4 million barrel production per day before the OPEC meeting came and cut it down to 1.4 million barrel per day. Similarly, the COVID-19 impact has collapsed the price to below cost of production.

“What this tells us is that as an agency of government responsible for oil and gas production, we have to put a watch on the cost. But the cost is our key focus going forward.

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“In 2018, the office of the Accountant General of the Federation charged us as a corporation to return N52 billion as operating surplus to the Consolidated Revenue Fund of the Federation and we have agreed on a repayment plan and we have already paid about N25 billion.”

While giving details on the 3-year projected revenues for 2021 to 2023, NNPC’s Group General Manager, Corporate Planning & Strategy, Meyisan Eyesan explained that the “Revenue projections are drawn from revenue from oil and gas sale. What we have presented today showed the revenue reconciled with all the regular parties involved in the FAAC process and the budget Office is fully represented in that process.

“We have all sat together, reconciled these figures and signed these numbers off and there are minutes of these meetings.”

According to him, the Corporation remitted the sum of N1.249 trillion to the government’s coffer in 2018 and an additional sum of N1.146 trillion in 2019.

“These figures are net of cost recovery. The cost includes physical deduction of JV operations, other government-funded projects, the National Domestic Gas Development project, pipeline maintenance among others.

“For 2020, N349 billion has accrued to government as at half year-end and that is reflective of the effect of the pandemic. I am sure that we all recall that the crude price clashed in the international market.

“We are fortunate that the prices have picked up, but we have to take it with a lot of caution because there is speculation that there might be a second wave of the pandemic.

In his remarks, Chairman of the Joint Committee, Hon. Abiodun Faleke who presided over the session, expressed grave concern over the high cost of crude oil production, saying: “the greatest problem that we have is the cost of production by NNPC. It is such that an ordinary eye cannot see it.”

In his response, however, Mr Ajiya argued that the current NNPC management remains the “most transparent regime ever. Every month, we publish what we collected and what we remit.”

Unsatisfied by his position, Hon Faleke who acknowledged the challenges facing the Corporation in the oil-producing region, said: “I know that we have a lot of issues in the Niger Delta region. Even the ones we are producing or the ones the oil companies are producing are hidden from us. We have written letters.

“The House passed a resolution investigating the $30 billion annual revenue leakages generally and we wrote to NAPIMS and till now, they find it difficult to give us data from 2010 till date. In other countries, they can roll it out with the press a button.

“From the data that has been submitted to us by other agencies, including banks and oil companies, we are able to tell you that there is no proper monitoring of our outflows in the oil industry. When we complete that analysis, we will let you see it. Can we come to a level when Nigeria can sit in a room and monitor its oil production?”

While responding, the NNPC Chief Financial Officer who expressed optimism on the automation of the oil and gas operations, said: “It is possible, but it will cost money. But the best agency to do it is the regulator which in this case is the DPR who are supposed to produce data that will be relied upon. We are an operator and we need the regulators to also check us and make sure that we are paying the right loyalty to the government.”

Meanwhile, Director General of Budget Office of the Federation, Dr Ben Akabueze has frowned at the failure of NNPC and its subsidiaries to submit their annual budgets for necessary scrutiny.

Dr Akabueze who was represented by his Technical Adviser, Dr Samuel Omenka, said: “Our expectation at the Budget Office is that all agencies of government should submit their budget to the National Assembly through the Budget Office.

“In the last few years, we have not been having that. That is important for us to know their revenue and expenditure as an agency of Government just like others.

“What we have just done now is the projection that goes into the federations account. But in terms of their operation and that of their subsidiaries, we are hoping that they will stick to the rules and submit their budget to the Budget Office.”

NIGERIAN TRIBUNE