FG Recovers N55bn From Oil Swap Deal

The NNPC has recovered N55 billion ($227 million) following a review of toxic crude oil for refined products swap contracts, the Presidency said yesterday. This was announced in a statement by Senior Special Assistant to the President on Media and Publicity Malam Garba Shehu.

He said the recovery was the result of an “extensive investigation into the various toxic crude oil for refined products swap contracts.” 

The report has shown that $420 million (N83 billion) has so far been reconciled in favour of the Nigerian National Petroleum Corporation (NNPC). 

The report, which was recently submitted to President Muhammadu Buhari by NNPC Group Managing Director Emmanuel Kachikwu, revealed that out of the reconciled amount, $277 million has been recovered in lieu of products.

Malam Garba said in the first 100 days of Buhari’s government, the NNPC had begun the process of recovering over $7 billion (N1.38 trillion) in over-deducted tax benefits from Joint Venture Partners on major capital projects. He said the report detailed successes recorded so far by the new management of the NNPC.

He added that the GMD had commenced performance measurement and benchmarking as well as value-for-money review of corporation and the JV Companies covering the period 2008 to 2013. 

The presidential aide further stated that the report indicated that this process might lead to further cost recovery. He said the report also indicated that a reputable international accounting firm had been engaged by the NNPC.

The firm is to ascertain the exact amount due government on the Strategic Alliance Contracts “entered by the NPDC where up to $2.46 billion (484.6 billion) of government money is to be recovered”.

Shehu stated: “According to the report, the GMD of NNPC is committed to continued review of all existing contracts and addressing the ones that are not favourable to the Corporation. 

“It was noted that significant cost reductions are also expected to ensure the Corporation remains profitable in the prevailing low crude oil price regime.” He added that progress was being made toward bringing back the national refineries to full production, noting that the management of the NNPC is working to ensure that this happens before the end of this year. 

“If this is completed, the report said, it is expected to achieve an annual savings of about $1billion ( N197 billion) worth of foreign exchange from fuel import substitution and additional total saving of over $500 million (98.5 billion) annually will be made from the petrochemical products of Kaduna Refinery and Petrochemical Company. 

“The report also disclosed that efforts at repositioning the NNPC have started yielding result on the nation’s economy. According to its content, gas supply to the power plants that had hitherto been handicapped by the supply of much-needed gas, has improved significantly from about 630 to 861 million standard cubic feet per day, which has resulted in a more steady power supply being witnessed in the country.

“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 Mega Watts respectively”, he said.