Facts have emerged why the Nigeria National Petroleum Corporation decided to withdraw $1.2 billion from Nigeria Liquified Natural Gas account.
The insight into why the money was withdrawn was given by the Chief Financial Officer of the NNPC, Isiaka Abdulrazak, when he appeared before the Senate Committee probing withdrawals from the NNLG account.
Abdulrazak said the money was withdrawn to pay the debt owned by the Nigerian Government to the International Oil Companies, which works in partnership with the NNPC.
He said during the previous administration despite high oil price, the Nigerian Government did not contribute anything to the business, which is known as Joint Venture Cash Call.
He explained that at that time, the Nigerian Government was lifting oil without contributing anything.
Abdulrazak said the total debt incurred by the government was $6.8 billion, but the NNPC negotiated with the companies and slashed 25 per cent from the debt, which was about $1.9 billion, adding that NNPC negotiated that the money will be paid over a period of five years.
He said part of the agreement is a lump sum of figure of $1.2 billion, which was set aside to settle backlogs and it was taken from the NNPC dividends account.
He explained that NNPC had applied for the withdrawal in 2016.