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NEITI: Nigeria losing $600m annually due to loopholes in lifting of crude oil

NEITI: Nigeria losing $600m annually due to loopholes in lifting of crude oil
June 08
06:26 2017
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The Nigerian Extractive Industry Transparency Initiative (NEITI) has said the country is losing $600 million annually to leakages in the process of lifting crude oil.

The agency on Wednesday urged the house of representatives to probe the alleged loss of $15.9 billion dividends accrued to the federal government.

Waziri Adio, the executive secretary, made the call at the ongoing investigative hearing on $17 billion undeclared crude oil proceeds by an ad hoc committee of the house of representatives.

Adio said the dividend was from the federal government’s 49 per cent equity in the Nigerian Liquefied Natural Gas (NLNG) Ltd.

He said that the money was received by NLNG but not found in the federation account.

Adio said the missing fund was in addition to another $21 billion confirmed crude oil sale but was not remitted to the federation account by the Nigerian National Petroleum Corporation (NNPC) between 2011 and 2014.

“As a result of non-passage of the Petroleum Industry Bill (PIB), the country is losing 600 million dollars annually due to leakages,” he also disclosed.

He said that there were many loopholes in the process of crude oil lifting for export in the country that must be urgently addressed.

Adio equally said that reported loss of crude to theft and vandalism by three international companies operating in the country amounted to $15.8 billion between 2011 and 2014.

According to him, the committee needs to be more clinical as the $15.8 billion lost to theft and vandalism is likely to be part of the $17 billion being investigated by it.

He said that the losses might have been incurred with the active connivance of Nigerian officials at the oil lifting platforms.

The NEITI boss presented oil-lifting breakdown which revealed loss of 385 million barrels in 2011, 402 million barrels in 2012, 363 million barrels in 2013 and 342 million barrels in 2014.

He regretted that Nigeria had no comprehensive mechanism at for monitoring and evaluating actual oil lifted at the loading platforms.

According to him, rather than three, Nigeria has two that were not properly placed, and as a result, officials have to rely on third party reports which may not reflect the true amount of crude lifted.

“Nigeria is losing revenue to oil theft on industrial scale and at a time, it is easy to see physical stealing of oil from a low flying helicopter,” he said.

“There are several things that must be looked into with a view of taking necessary action. For instance, the NLNG got 15.9 billion dollars as Nigeria’s returns for its 49 per cent equity in NLNG Ltd.

“Meanwhile, this dividend was collected by the NLNG but was not found in the Federation Account. We need to ask questions on what happened to the money.”

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