TheCable

E never tey wey former Vice-President Abubakar Atiku tok sey di order wey federal govment give Nigerian National Petroleum Company (NNPC) sey make dem cari all di moni wey dem make ontop crude oil give Central Bank of Nigeria (CBN) no correct.

Atiku make di claim afta Olayemi Cardoso, govnor of CBN, tok sey di bank dey partner with di ministry of finance and di NNPC to make sure sey “all di dollar wey go enta our account go still enta CBN”. 

Sake of wetin di CBN govrnor tok, di former presidential candidate say di decision no respect di operational independence wey di national oil kompani get.

“Even though di order wey federal govment give, sey make di Central Bank of Nigeria (CBN) dey collect di moni wey Nigerian National Petroleum Company Limited (NNPCL) make from crude oil, wan get k-leg, dat action no dey legal, na so Atiku tok.

“Di order no respect di independence of di NNPCL.”

Atiku tok sey make di govment “respect wetin di law tok, allow NNPCL do dia business as independent kompani”.

WETIN WE CHECK

Di national oil kompani turn limited liability kompani for July 2022, to become commercial venture, in line with di provisions of di Petroleum Industry Act (PIA). 

Becos of dat, di national oil firm, wey dem incorporate under di Companies and Allied Matters Act (CAMA) in September 2021, dey run as profit-oriented kompani.

During di opening ceremony of di kompani, former President Muhammadu Buhari tok sey NNPC Limited go operate “without any institutional control, like di treasury single account, public procurement, and Fiscal Responsibility Act”.

Howeva, di federal govment go be di sole shareholder of di kompani — even as di kompani wan go public (sell dia shares to institutional investors) for di near future.

WETIN DI LAW TOK?

Di NNPC, according to di PIA, suppose keep 20 percent of im profit as retained earnings, while 80 percent go reach government as shareholder. 

Section 53 (7) of di PIA tok sey di NNPC and any of dia subsidiaries go conduct dia affairs on a commercial basis for manner wey go dey profitable and efficient “without using govnment moni even wen business tight”.

E still tok sey di NNPC “go operate as Companies and Allied Matters Act entity wey go declare dia dividends to dia shareholders, still keep 20% of di profits make business try grow”.

Di law still tok sey anywhere di NNPC get participating interest or 100 percent interest for lease or licence, di kompani go still pay im share of all fees, rents, royalties, taxes, and profits.

Di regulation still come tok sey di NNPC na di concessionaire of all production-sharing contracts (PSC), profit-sharing and risk service contracts — on behalf of di federation.

According to section 64 (c) of di PIA, di NNPC get power to lift and sell oil under these contracts for commercial (management) fee wey dem don agree on. After dem comot all di moni wey dem spend and di cost of oil production, di NNPC and dia partners go come share di proceeds, aka  profit oil/gas.

Out of di total profit oil/gas wey NNPC gada, 30 percent go dey one side to explore di kontri frontier basin.

Afta di deduction, di NNPC suppose submit di remaining proceeds of di sales to di federation account  — wey fit be through di CBN or oda financial institutions wey di govment and di oil firm gree.

WETIN EXPERTS TOK?

Oyeyemi Oke, partner for AO2LAW, still tok sey NNPC na private limited liability kompani.

“Wetin e mean be sey e no be public kompani based on wetin di CAMA Act tok. Na di Ministry of Finance Incorporated (MOFI) and di Ministry of Petroleum Incorporated (MOPI), wey be government-owned entities, get NNPC Limited,” na so im tok.

“From private revenue perspective, if kompani dey privately owned, di pesin wey go decide how dem go manage di revenue na di shareholders (MOFI and MOPI). If these two decide sey NNPC moni suppose go CBN, I no sure sey dem break any company law rules.”

Afta meeting for Abuja on February 8, 2024, di NNPC and di CBN announce sey dem “review di decision wey di NNPCL make to keep big part of dia revenue and oda banking services with di CBN”.

Inside one statement, di two organisations tok sey dem set limit for di management of di oil firm revenue, sey di moni wey dem dey submit no mean sey dem go stop transactions with commercial banks.

On February 5, 2024,Cardoso use style tok sey apart from di NNPC, some oda ministries, departments, and agencies (MDAs) folo dey inside di arrangement to “move dia moni straight to di central bank”.

These MDAs togeda wit oda revenue-generating agencies (RGAs) dey submit dia earnings —even wit plenti accounts — to di federation account.

Di federation account allocation committee (FAAC) go come distribute di moni give di three tiers of government.

“Ordinarily, NNPC proceeds suppose go di federation account. Di question suppose be, where di federation account dey? Na inside private bank accounts, abi na inside CBN? Ordinarily, di CBN suppose be di guardian of moni wey dey enta di federation account,” na so Oke tok.

If dis kain arrangement dey, Oke tok sey e no go dey strange for CBN and NNPC to gree make moni dey enta di bank direct since “e suppose be CBN wey dey control di federation account”.

Jide Pratt, oil and gas expert, folo tok ontop di mata and e tok sey di move by di CBN no fit dey illegal, sey even though di NNPC don become private entity, na still federal govment get am 100 percent.

Becos of dat, e tok sey di Nigerian Upstream Petroleum Regulatory Company (NUPRC) regulations “go apply to NNPC with respect to crude oil operations”.

“Wit wetin I don see, NNPC dey use mouth talk true. Before, e get some kain tins wey dey mixed up from DSDP sotey e bin no dey easy to track FX,” na so im tok.

Ayodele Oni, partner, energy practice group for Bloomfield LP, tok sey di NNPC-CBN agreement na move towards centralising correspondent banking. 

“Even though we understand sey dem wan centralise corresponding activities, e still no solve di problem of limited FX for di kontri,” na so e tok.

Oni add sey di CBN govnor “don already find heavy value of transactions wey bin dey part of backlog illegally”.

In December 2023, Mele Kyari, NNPC’s group chief executive officer (GCEO), tok sey di firm deposit N4.5 trillion inside di federation account from January to October 2023.

FINAL TOK

Di claim wey Atiku make wey tok sey e dey illegal to transfer crude oil proceeds to di CBN no correct. Di govment na di major shareholder for di oil firm and dey entitled to 80 percent share of profits.