Reps investigate loss of $60bn to NNPCL joint venture agreements

In response to the Nigerian National Petroleum Company Limited Joint Venture Agreements’ overstated cash calls, the House of Representatives has indicated its willingness to look into the loss of approximately $60 billion in revenue.

As a result, the House directed the pertinent committees to carry out an exhaustive investigation into all NNPCL Joint Venture operations in order to ascertain whether due process and diligence were followed, as well as the income and cash call expenses owed to each partner, particularly the Federation.

The vote on a resolution that Chika Okafor had sponsored during Wednesday’s plenary was the precursor to this outcome.

By moving the resolution, Okafor stated that NNPCL, acting on behalf of the Federal Government, manages joint ventures and associated contracts with private oil firms in the gas and oil sectors with the goal of generating sustainable revenue production and advancing the country’s economic development.

As representatives of the Federal government and Federation, the legislator pointed out that the NNPCL holds roughly 60% of the shares, with the remaining 40% coming from other partners.

A “Joint Operating Agreement” that outlines the obligations of each participant in the enterprises is supposed to govern how the joint ventures are run, according to him.

The legislator stated that the NNPCL Upstream Investment Management Services, a division within the NNPCL responsible for cost negotiation (both Capex and Opex), have generated enormous losses in the neighbourhood of $60 billion over the years as a result of bloated cash call expenses.

Even while NUIMS is conscious of the need to maintain probity, openness, and value for money in the NNPCL Joint Venture operations, its actions have resulted in significant revenue losses, fiscal deficits, and a worrisome debt profile.

The House has, however, demanded that the Federal Roads Maintenance Agency, or FERMA, be given the accumulated five percent users’ tax on petrol pump prices and diesel so that it can carry out its duties.

This happened after a motion by Aderemi Oseni was adopted, requesting that the Nigerian Midstream and Downstream Petroleum Regulatory Authority, Ministry of Petroleum Resources, NNPCL, Ministry of Finance, and Office of the Account General of the Federation make sure that the user’s charge is sent to FERMA right away in accordance with Section 4(1) of the Agency’s (Amendment) Act, 2007.

“The fund of the agency shall consist of 5% users’ charge on pump price of petrol, diesel and of which 40% will accrue to FERMA,” stated Oseni, leading the debate on the motion, to highlight the significance of funding for road management and maintenance. This is stated in Section 4(1) of the Federal Roads Maintenance Agency (Amendment) Act, 2007.

He expressed the House’s “disturbation that the perpetual non-remittance of N900 billion in user charges on petrol and diesel pumps negatively impacts the FERMA’s finances and performance consequently affecting the state of federal roads” over the Users’ Charge not being remitted to the Agency since the start of the Federal Roads Maintenance Agency (Amendment) Act, 2007, which embodies this provision. According to him, this has accumulated to about N900 billion.