Shocking Revelation: Documents Trace Whereabouts of 'Missing $7.8bn' NLNG Dividends (2005-2013)

TheCable has seen documents indicating the trail of the “missing” dividends paid by the Nigeria Liquefied Natural Gas (NLNG) to the Nigeria National Petroleum Corporation (NNPC) between 2005 and 2013.

The Economic and Financial Crimes Commission (EFCC) and the senate are currently investigating the findings of the 2013 audit report of the Nigeria Extractive Industries Transparency Initiative (NEITI) which raised the issue.

NEITI had said the NNPC, which holds 49% equity in NLNG on behalf of the government, did not remit a total of $12.9bn to the federation account during the period.

In its reaction, the NNPC said a part of the dividends was reinvested on behalf of the federal government and the rest is now in the treasury single account (TSA).

However, TheCable has seen letters exchanged by former President Goodluck Jonathan and Diezani Alison-Madueke, the former minister of petroleum resources on $7.85 billion out of the dividends.

Sources at the ministry of petroleum resources showed TheCable the letters that were written between March and May 2011.

A letter dated March 30, 2011 and seen by TheCable showed that Alison-Madueke sought the authority of the president to use $7.85 billion of the dividends to fund NNPC’s contribution to the 10 million tons per annum Brass Liquefied Natural Gas (LNG) project.

The request was granted on May 13, 2011 via a reply written by Matt Aikhionbare, who was Jonathan’s senior special assistant on administration.

-Equity Contribution

Alison-Madueke’s letter highlighted the importance of the Brass LNG to the economy.

She said the NNPC needed to pay its equity contribution to the $16 billion project and sought the approval of the president.

With NNPC holding 49% of the equity, the amount came to $7.85 billion.

The letter was silent on how much dividends were paid into NNPC’s coffers, but the NEITI said NLNG paid $12.9 billion to the corporation over the eight-year period.

Jonathan approved the request and directed that the $7.85 billion be sourced primarily from the dividend account.

There are still questions over the eventual destination of the payment as the Brass LNG project has since stalled, with the final investment decision (FID) hanging – partly because of funding issues.

EFCC is working on the possibility that the $7.85 billion might not have gone to Brass LNG.

-Key Challenges

The project, to be located on Brass Island in Bayelsa State, next to the Agip oil terminal, was conceived in 2001 as a two-train plant of 10mtpa, with provisions for expansion.

In her letter, Alison-Madueke said the project was contending with two key challenges of gas supply and financing.

Controversies remain over NNPC’s claims that part of the money was invested on behalf of the federal government.

There is a legal lacuna on who owns NNPC’s 49% equity – is the federal government or the Federal Republic of Nigeria?

NEITI, in its report, queried the expenditure of dividends without appropriation by the national assembly – that is if the money belong to the federal federal government.

However, if the money belongs to the federation, NNPC’s claim that it paid another part to TSA  raises questions over whether the money should not have been paid to the consolidated federation account as revenue to the three tiers of government.

Culled from: TheCable News