The Nigerian National Petroleum Corporation (NNPC) has maintained that its withdrawal of $1.05 billion from the NLNG Dividend Account was legal.The Senate is currently probing the action, which it claimed was done to support fuel consumption.
Though analysts have said the withdrawal to augment, what they alleged obscure subsidy regime, remained a critical challenge to the nation’s economy, NNPC’s Chief Financial Officer (CFO), Isiaka Abdulrazaq, however told reporters that extant laws were resorted to before the consummation of the deal.
According to him, the 2018 Appropriation Act defined revenue from NNPC as net of cost, indicating that the oil agency could defray the cost of its operations from earnings.He also cited the NLNG Act, which explicitly provides that the corporation could defray its cost from the dividends, as one of the legal grounds relied upon for the expenditure without recourse to appropriation by the National Assembly.
Abdulrazaq recalled the case instituted by some state governments in 1999 seeking the interpretation of revenue on account of their contention that all accruals from oil and gas operations amount to revenue and should be swept into the Federation Account.
The ruling by the Supreme Court in 2002, according to him, was in tandem with NNPC’s position that revenue is accruals of net of cost.His words: “We have provided the legal authority on which we rely to use funds from the NLNG Dividend Account to the Senate. We believe they will reason with us. But if need be, we will seek legal opinion.
“NNPC is very open and transparent. We publish our Monthly Financial and Operations reports in the media. No one does monthly reporting, not even the international oil companies or the publicly quoted companies. The best they do is quarterly reports.
“But we do monthly reports of revenue (profit and loss for the entire corporation, including the subsidiaries). We do operations report on how much oil and gas that were produced and sold.”The NNPC official noted that the money in question was channeled to three strategic infrastructure namely the Manbilla Hydro Power, second Niger Bridge and the Lagos-Ibadan Expressway projects.