Nigerians dispute NNPC’s N287bn profit in COVID-19 year

…..says the figures are manipulated

By Our Correspondent

Just as Nigerians are trying to come to terms with the brouhaha that accompanied President Muhammadu Buhari’s signing of the Petroleum Industry Bill (PIB) into law becoming the Petroleum Industry Act (PIA), yet another bombshell has erupted.

In what seems like Mr. President telling the world that his ministry is now iron-cast in efficiency, last Friday, announced the miraculous turnaround of the national oil company’s fortune.

President Buhari who also doubles as the minister of petroleum resources had gladly announced the posting of profit by the Nigerian National Petroleum Corporation (NNPC) for the year ended December 31, 2020.

The first time the Corporation would report such in its 44-year history.

Proclaiming the new feat, the excited president said, “I am pleased to announce the declaration of profit after tax of N287bn in year 2020 by the Nigerian National Petroleum Corporation. This is sequel to the completion of the statutory annual audit exercise for year 2020.

“The NNPC losses were reduced from N803bn in year 2018 to N1.7bn in year 2019 and the eventual declaration of net profit in year 2020 for the first time in its 44-year history.”

However, the numbers seem not to have gone down well with financial and energy experts. As criticisms have continued to trail the announcement.

Punching holes in the figures announced, Dr Nnaemeka Obiaraeri, an economist stressed the need for the Corporation to make available the comprehensive report for critical analysis.

He described the result as deceitful and “manipulative balance sheet engineering, by consolidating the Corporations of independent entities set up by Acts of Parliament for the benefit of the federation.”

Probing the report, he said, “I made a clear submission, where I clearly outlined that the NNPC as a corporation and entity cannot point to any productive or trading activities that is executed in 2020 to generate and report such huge profits of N287bn in 2020 from a consistent 6 years loss positions ( 2015 to 2020).

“From my desktop review and analysis , I knew straight away, that it is either they reported bubble paper profit to enable them debit a ledger for a particular nefarious game or they engaged in unwholesome balance sheet engineering games . Now, it is getting clearer, he said.

Expatiating, he said, “What the Group Managing Director of NNPC, Mele Kyari presented as profit from direct NNPC operations and activities is actually a retention of 20% of the profits and dividends paid by independent entities, which the NNPC received on behalf of the federation (FGN, States and LGAs). This is the first time they are allowed to retain such.

“According to a reliable source, before now, the FGN and the states used to collect 100% of all the dividends paid by these independent entities .

“However, in 2020, the NNPC decided to retain the 20% from the dividends paid the the NLNG, the NGC, the West African Gas Pipeline (Operated by Chevron) etc and consolidated same in their balance sheet.

“So, what they reported were retained portions of the dividends paid by other entities for the Federation. All the poppycock by Melee Kyari of improving efficiency at the NNPC and cut cutting cost measures over the last one year are just hogwash. NNPC as an entity under him, its operations and that of the three refineries are cesspool of losses and perfidy . Don’t be deceived by their tales by moonlight,” he said.

Further critiquing the report he said, “It is a grave affronts to our sensibilities and intelligence for these guys to receive about $2.5billion/N1trillion (using CBN official rates) as combined dividends on behalf of the federation from independent entities established by acts of Parliament for the benefits of the federation, consolidate the retained 20% portion of dividends meant for the Federation accounts and then report it (N287bn) as profits made from the activities of a corporation that did nothing, other than , import pms at a loss under subsidies and ignorant people clap away without asking questions.

“The most painful thing here is that these people understand that IGNORANCE walks on all four in Nigeria. So, they assumed rightly, that a majority of us have no common sense , capacity, competence and ability to dig beyond the surface. They also realise that investigative journalism built on deep knowledge is absent in this clime. THEY ALSO realise that we do not have many people with the discipline, knowledge, good conscience and integrity in the NASS to probe, dig, uncover and recover as we have it in the US Congress. So, they corner our resources, throw pittance at us and then rub it on our faces.

“For those, who have the discipline, knowledge, ability and time, kindly fish out the 2019 audited financial reports of the following independent entities set up by acts of Parliament for the benefits of the federation:

“The NLNG; The West African Gas Pipeline Company (Operated by Chevron); The Nigeria Gas Company(NGC); Duke Oil; The NPDC; Bonny Transport Company; Wheel Insurance; etc

“When you add up all of the dividends for the year ended 2019, which was declared, paid and transfered to the NNPC accounts in 2020 on behalf of the federation , you will get in excess of over $2.5bn/N1trillion (using the CBN official rate).

“These guys at the NNPC are not sincere one bit. It is the height of deceit and manipulation of numbers, for them to gleefully consolidate the profits and dividends of independent entities, with independently audited balance sheets , who have been making and reporting consistent profits over the last 10 years,.retain 20% of such dividends, use them to cover the huge losses and pillaging at the NNPC and report same as profit for the NNPC, for the first time over the last 43 years .

“Honestly, if the misappropriation and cornering of our national resources at our MDAs like the NNPC, Petroleum Ministry, FIRS, Customs, NIMASA, NPA, are checkmate and the leakages plugged, Nigeria will not need to borrow to fund our critical infrastructure needs.

Similarly, the founder of IBTC Stanbic Bank, Atedo Peterside, on Sunday challenged the NNPC to clarify allegations that it dipped its fingers in the federation account in order to announce a profit of N287bn.

Reacting to the ongoing discourse in a tweet on Sunday, Peterside said, “There is an allegation that NNPC dipped their fingers in the Federation Cookie Jar in order to announce bumper 2020 profits; they should come clean and publish details of all dividends received by them and tell us which ones they recently diverted from the Federation to themselves.”

On 19 April 2021, it was reported that the total revenue generated by the NNPC from crude oil and gas exports plunged by 45.98 per cent in 2020 amid the COVID-19-induced collapse in price and demand.

The report said Nigeria’s revenue from the exports of crude oil and gas fell to $2.62bn in 2020 from $4.85bn in 2019.

It added that proceeds from the sale of domestic crude oil and gas also dropped to N1.54tn in 2020 from N1.57tn in 2019.

Reacting to Peterside’s tweet, @DrJoshObi said, “I read a while ago that the FG recently approved some billions for turnaround maintenance, maybe they recorded it as ‘inflow’.”

@ayotula said, “I knew something was wrong, NNPC for the first time declared profit and next says it wants to sell shares.

“I knew it was stage managed because of the provisions of the PIA. It is expected that NNPC would have made profits for some years before thinking of shares.”

@FAGalileo said, “PIA signed into law and the next big announcement is NNPC declaring profits for the first time in 44 years. Who is fooling who?

“The @NNPCgroup should publish the subsidiary and its activities that produced this huge profit margin. Or was this done for the 30 per cent frontier basin?”

The Group Managing Director, NNPC, Mele Kyari, had on Thursday night said the corporation was able to cut down its procurement costs by 30 per cent last year which helped it to post the N287bn profit.

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