Our JVCC Naira, USD accounts are self-funding strategy, not secret accounts- NNPCL claims 

Oredola Adeola

The Nigerian National Petroleum Corporation Limited(NNPCL) has revealed that its Joint Venture Cash Call (JVCC) NGN and USD accounts were created to cater for the funding of cash calls for the various Joint Ventures(JVs), contrary to the claim by both Mr. Chize Peters, an official of the office of the Accountant General of the Federation, and Hon. Mark Gbillah, member of the House of Representatives ad hoc Committee, that it is operating a secret account in breach of the Treasury Single Account (TSA).

Garba Deen Muhammad, Group General Manager, Group Public Affairs Division, NNPCL made this known statement released at the weekend, denying the allegation.

EnergyDay gathered that  Mr. Chize, staff of the Accountant General of the Federation, had earlier informed the Hon. Abubakar Fulata-led  House of Representatives ad hoc Committee set up to investigate “the structure and accountability and production sharing contracts of the NNPC from 1990 to date” that the NNPCL is operating a separate cash call account domiciled in the Central Bank of Nigeria, without the signature of the accountant general office.

Meanwhile, the NNPCL stated that the allegation brought to light during an investigation into all Joint Venture agreements and Production-Sharing Contracts in the oil and gas industry since 1990, was not correct.

Garba Deen said, “The NNPC, directly or through its upstream arm, the National Petroleum Investment Management Services (NAPIMS), does not operate secret accounts at all.

“The Joint Venture cash call accounts denominated in US Dollars and Nigerian Naira are all domiciled with the Central Bank of Nigeria (CBN) in line with the Treasury Single Account (TSA) policy.

“The Joint Venture Cash Call (JVCC) NGN and USD Accounts were created to cater for the funding of cash calls for the various Joint Ventures managed by NNPCL on behalf of the Federal Government.

“Joint Venture Proceeds Accounts were opened for the individual JVs to implement the Self-Funding Strategy which aims at making the JVs self-reliant,” NNPCL noted.

The NNPCL spokesperson confirmed that contrary to the claim by the Chize, the Office of the Accountant-General of the Federation (OAGF) is fully aware of the JVCC accounts, adding that the OAGF regularly sanctions and approves the updates/change of signatories to the accounts.

He said, “NNPC has documents where these correspondences with the OAGF were acknowledged.

“The NNPC/NAPIMS books of accounts in respect of the Federations Upstream Petroleum activities are audited annually by independent external auditors.

“A critical part of the independent statutory audit is the sending of circularization to Banks to confirm balances and bank accounts belonging to NNPC/NAPIMS. Audited Financial Statements (AFS) are submitted to all stakeholders including the National Assembly.

“In addition, the Office of the Auditor General for the Federation conducts periodic (yearly) checks of the activities of NNPC/NAPIMS. Also, the activities of NNPC/NAPIMS are audited yearly by the Nigerian Extractive Industry Transparency Initiative (NEITI).

“NNPC has documented evidence of the correspondences between NNPCL and The Office of the Accountant-General of the Federation (OAGF) before the accounts were opened with the Central Bank of Nigeria (CBN), in line with the Treasury Single Account (TSA) policy.

“We also have evidence of reconciliations carried out with the CBN for the year ended 31-12-2021 in respect to the JV Cash Call Accounts.

Garba Deen however noted that with the multiple layers of checks and balances, the NNPCL can’t operate secret accounts until the ad hoc Committee, with due respect to its competencies, discovers it.

He also noted that if such a “secret account” does exist, then the NNPCL certainly is not aware of it and has absolutely nothing to do with it.

The Nigerian Government, through the NNPC, had over the years piled up unpaid bills, referred to as cash calls, which it was obliged to pay the International Oil Companies(IOCs) that it is operating joint ventures for oil exploration and production.

EnergyDay gathered that the cash calls are sent by the JV operators to non-operating partners(FG) for payment in the light of anticipated future capital, operating expenditures, or the need for additional capital contributions.

The JV partners are; Shell Petroleum Development Company, Mobil Producing Nigeria, Chevron Nigeria Limited, Total Exploration and Production Nigeria, and Nigeria Agip Oil Company.

It is however not clear why NNPCL is still maintaining a JV Cash Call Account, as it would be recalled that the FG  had in 2017 ended the country’s long term joint venture cash calls.

The FG has paid $3.81bn cash call arrears in JVs to the IOCs as of May 31, 2022, leaving an outstanding balance of $873.34m. The total negotiated debt between the government and the five IOCs was put at $4.68bn.