In the first 100 days of President Buhari’s government, the Nigerian
National Petroleum Cooperation (NNPC) has begun the process of
recovering over $7 billion in over-deducted tax benefits from JV
Partners on major capital projects.
In a report submitted to President Muhammadu Buhari by its new
management detailing its successes so far, the Group Managing
Director,GMD of NNPC, Ibe Kachikwu had commenced Performance
Measurement & Benchmarking as well as Value for Money Review of NNPC
and the JV Companies covering the period 2008 – 2013. A report
indicated that this process may lead to further cost recovery.
In addition, the report said that a reputable International
Accounting Firm has been engaged by the NNPC to ascertain the exact
amount due government on the Strategic Alliance Contracts entered by
NPDC, where up to $2.46 billion of government money is to be
recovered.
It also revealed that consequent upon an extensive investigation of
the various toxic crude oil for refined products swap contracts, a
total sum of $420 million has so far been reconciled in favour of NNPC
and is now due for recovery from the legacy OPA/SWAP contracts. Out of
the reconciled amount, the sum of $277 million has been recovered in
lieu of products and the recovery effort is still ongoing, the source
added.
According to the report , the GMD of NNPC is committed to continued
review of all existing contracts and addressing the ones that are not
favourable to the Corporation. It was noted that significant cost
reductions are also expected to ensure the Corporation remains
profitable in the prevailing low crude oil price regime.
He added that progress is being made toward bringing back the nation’s
refineries to full production, noting that the management of the NNPC
is working to ensure that this happens before the end of this year.
If this is completed, the report said, it is expected to achieve an
annual savings of about $1billion worth of foreign exchange from fuel
import substitution and additional total saving of over $500 million
annually will be made from the petrochemical products of Kaduna
Refinery and Petrochemical Company.
The report also disclosed that efforts at repositioning the NNPC have
started yielding result on the nation’s economy. According to its
content, gas supply to the power plants that had hitherto been
handicapped by the supply of much-needed gas, has improved
significantly from about 630 to 861 million standard cubic feet per
day, which has resulted in a more steady power supply being witnessed
in the country.
Indeed, the report revealed that gas supply for power and peak
generation have in recent times reached a historical high of 876
million standard cubic feet per day and 4,782 Mega Watts respectively.
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