Economy
CNPP Doubts NNPC’s N674bn FY’21 Profit, Calls for Investigation
By Aduragbemi Omiyale
The Conference of Nigeria Political Parties (CNPP) has expressed doubts over the profit after tax of N674 billion declared by the Nigerian National Petroleum Company (NNPC) Limited on Tuesday in the 2021 financial year.
In a statement issued on Wednesday, the group called for an independent investigation of the NNPC management and board members in the last seven years.
Yesterday, the Group Chief Executive Officer of NNPC Limited, Mr Mele Kyari, informed reporters at a press briefing in Abuja that the organisation improved its net profit by 135 per cent from the preceding year’s N287 billion.
“It is difficult for the NNPC Limited to convince patriotic Nigerians that its declared profits in two years are not manipulated,” CNPP said in a statement signed by its Secretary General, Mr Willy Ezugwu.
“The CNPP calls for proper investigation of the management of the company and the board of NNPC over the last seven years, particularly those who approved 2021 audited financial statements, declaring NNPC to have made the unimaginable 134.8 per cent YoY profit growth in 2021.
“To point out a few reasons why the profits being declared annually by NNPC since 2020 are very doubtful, we note that in 2017, Nigerian lawmakers uncovered alleged $15 billion unremitted oil and gas revenue.
“The alleged revenue leakage was exposed by the House of Representatives ad-hoc committee investigating missing $17 billion crude oil and liquefied natural gas revenue when the committee uncovered the $15 billion unremitted revenue into Federation Account.
“According to the House Committee, a trace of the alleged missing fund, believed to have been stolen and diverted to a foreign destination, was contained in two documents submitted by the then Nigerian National Petroleum Corporation, NNPC, at the committee’s sitting.
“To date, nobody has been prosecuted, and nobody was sacked.
“Again, by 2018, N4 trillion was reported to be unremitted by the NNPC as revealed in 2016 audit report indicating that some revenue collecting agencies in NNPC and DPR did not remit any revenue into the Federation account for some months, neither was any explanation given why those months recorded no revenue.
“The audit report highlighted a few of the auditor’s discoveries, indicating that the total unremitted revenue as of 1st January 2016 from amounts payable into the Federation Account by NNPC was ₦3,878,955,039,855.73 (that is, three trillion, eight hundred and seventy-eight billion, nine hundred and fifty-five million, thirty-nine thousand and eight hundred and fifty-five naira).
“Also, the sum of N1,198,138,355,860.30 was due in revenue to the Federation Account out of the total generated in 2016. However, NNPC paid the sum of N1,000,545,058,966.2, resulting in an amount withheld of N197,593,296,894.02. This brought the total amount withheld by NNPC from the Federation Account as of 31 December 2016 to N4,076,548,336,749.75,” the CNPP stated.
The umbrella body of all registered political parties and political associations in Nigeria then accused the “NNPC management of inability of keeping accurate records, let alone making huge profits as it has been declaring since the 2020 pandemic year.
“For instance, it was reported that NNPC failed to clearly state exactly the quantity of crude oil lifted or delivered to Warri Refinery and Petrochemical Company (WRPC), and Kaduna Refinery and Petrochemical Company (KRPC) in the said audit report.
“Accordingly, media report in 2018, from the examination of the Domestic Crude Oil Lifting sales profile, a total crude oil lifting of 8,399,027 bbls with a total sales value of $376,655,589.03 (N102, 659,577,632.16) was stated to have been lifted jointly by these two companies.
“Therefore, the auditor held that the failure to properly separate these deliveries and charge directly to each company makes it difficult to reconcile and account for each lifting.
“Again, to date, nobody was queried, and no person was sacked”, the CNPP observed.
“Also, in 2019, the House of Representatives accused Federal Government’s ministries, departments and agencies of failing to follow the Treasury Single Account (TSA) policy, leading to revenue leakages.
“The House said it had discovered that over $900m was still “being held” by the MDAs outside the TSA.
“The House indicted the Nigerian National Petroleum Corporation, the Nigerian Ports Authority, the Federal Inland Revenue Service, the Nigeria Customs Service, ministries and banks of various infractions.
“The House specifically accused the NNPC of extra-budgetary spending as the committee said that from the information submitted by NNPC itself, Brass LNG received an appropriation of $511.60m while the actual release was $461.54m during 2012-2017 fiscal years.
“The House panel said that the ‘Appropriation Acts 2012-2017 depicted $550.33m for the Brass LNG project. But it is very important to note some key observations in the table above: The total appropriation is $511.60m, according to the NNPC. The actual funding for the Brass LNG project from 2012 to 2017 stood at $461.54m. The unutilised portion is $331.72m. The NNPC stated unrealised balance with the DMBs being $708.29m.’
“The House Committee then observed that some MDAS claimed to have obtained a presidential exemption to operate certain accounts outside the TSA policy.
“In the case of NNPC, the committee insisted on sighting the purported exemption letter. However, to the dismay of the committee, the letter was only conveying the approval of the President, signed by an assistant director.
“The lawmakers also accused NNPC of financial operations outside the TSA, saying, “The balance in this (CBN Joint Venture) account as reported by the NNPC, dated 30th October 2017, stood at $188,900,383.49. These are the various accounts classified as accounts still not being moved to TSA by CBN, DMBs account.”
“The House committee had also discovered three accounts held by the NNPC in Aso Savings and Loans PLC and Unity Bank PLC where the accounts included two placement accounts called NNPC PFL Placement Deposit and the third account called NNPC Pension Fund account. The total balance in these accounts as of August 27, 2017, stood at N1, 079,444,746.49”, the CNPP quoted the committee.
“No fewer than 20 recommendations by the House Committee panel were unanimously approved by the House, and till date, no official of NNPC was sacked even as none was prosecuted.
“According to a report by Nigeria Extractive Industries Transparency Initiative (NEITI) in 2021 and widely published in the media, a total of 77 oil companies were owing Nigeria N2.659trn unremitted funds.
“Besides the consistent revenue shortfall yearly, which resulted in Nigeria’s borrowing sprees to finance its huge budget deficit with debt servicing gulping as much as 98 per cent of Nigeria’s revenues, the NNPC was reported to have made a huge deduction of N149.2 billion from the federation’s joint account when the Federation Account Allocation Committee (FAAC) met in October 2021.
“If NNPC makes huge deductions from the Federation Account and often withholds Federal Government’s legitimate revenues, how is it possible for the same NNPC to be declaring profits for the second consecutive year?
“Or does the NNPC convert the unremitted revenues and deductions from Federal Accounts into profits?, the CNPP asked.
“The issue of oil theft was also mentioned by the NNPC Limited’s boss, Mallam Mele Kyari.
“He said that the oil spill in the Bodo community of Rivers State has led to the Nembe pipeline, which is making the country lose over 100,000 barrels per day while lamenting the high rate of oil theft in the country.
“For the CNPP, we believe that the NNPC knows those behind oil theft, and they should go after them instead of mouthing that it has heavily invested in securing its facilities in the oil-rich region.
“If they don’t know, they should see human rights lawyer, Femi Falana (SAN), who recently said that they have all information relating to stolen Nigerian crude oil. The lawyer recently pledged to make available such information if needed by the Federal government”, the CNPP stated.
“As far as the CNPP is concerned, rather than continuing the fruitless policy of destroying hundreds of thousands of illegal refineries operating in the Niger Delta for these years, the NNPC should set up criteria for both standardising the operations of the legal refineries operators and licencing them as modular refineries operators in the region to save Nigeria billions of dollars wasted on importation of refined petroleum products due to ineffective government refining facilities.
“But such ideas as local refining of crude oil can never be welcomed by the NNPC management and Board who could be the ultimate beneficiaries of the sustained fuel subsidy regime that has been severally adjudged as the most corrupt in the world even by the All Progressives Congress (APC) before it came to power in 2015.
“NNPC management would rather invest in endless and wasteful turnaround maintenance of Nigeria’s expired refineries instead of building modern refineries, at least one refinery in the last seven years of the APC administration.
“Until NNPC management is made to answer all questions relating to unremitted revenues and its corruption-infested subsidy regime, the CNPP will consider any profit declared by the NNPC management as mere paperwork and, most likely, a manipulation of figures to confuse unsuspecting Nigerians.
“Therefore, we believe that a profitable NNPC can only be possible when the management of NNPC is held accountable, and Nigeria gets functional refineries that would bring to an end the current importation of refined petroleum products into the country.
“We’ll continue to insist on an independent forensic audit of NNPC operations from 1999 to date to enable Nigeria to recover all stolen oil revenues, some of which have been declared as unremitted, particularly since 2015”, the CNPP said.
By Adedapo Adesanya
Dangote Petroleum Refinery is preparing to raise about $5 billion through an initial public offering (IPO) expected to conclude in October, in what could become the largest stock market listing in Africa’s history.
The company has already submitted an initial application to the Securities and Exchange Commission (SEC), with approval expected in the coming weeks. Once authorised, the refinery is expected to release its prospectus in September ahead of the public offer.
The primary listing will be on the Nigerian Exchange (NGX) Limited, although investors across Africa are expected to participate through structured investment instruments rather than a dual listing.
The proceeds will be used to expand the capacity of the 700,000-barrels-per-day refinery in Lagos and possibly support plans to replicate the project in Kenya as Dangote seeks to deepen Africa’s energy independence.
The proposed IPO comes after the refinery benefited from increased demand for refined products during the recent Iran conflict, supplying jet fuel across Africa and into Western Europe as global shortages disrupted markets.
As per Reuters, stock exchanges in South Africa, Kenya, Egypt, Ghana and Rwanda have held discussions with advisers to the transaction as interest in the offering continues to build across the continent.
Kenya alone could account for as much as $500 million of the targeted capital raise, driven largely by demand from institutional investors, including pension funds, the publication reported.
While the company is targeting a $5 billion raise, the final amount will depend on the outcome of the SEC’s review. If achieved, the offering would represent more than four per cent of the Nigerian Exchange’s current market capitalisation.
The IPO follows a $2.5 billion private placement completed last month, in which a six per cent stake in the refinery was sold, implying a valuation of about $40 billion.
That valuation, however, would place the refinery well above several listed global refining companies. Turkey’s Tupras, which operates a similar combined refining capacity across four facilities, has a market value of roughly $12 billion, while US-listed HF Sinclair, with a comparable processing capacity, is valued at around $16 billion.
Although the NGX generally requires companies on its main board to maintain a minimum free float of 20 per cent, there have been exceptions. Dangote Cement, for instance, currently has a free float of just over 12 per cent.
The publication also reported that investors outside Nigeria are likely to gain exposure through instruments such as global depositary receipts or exchange-traded products linked to the Nigerian-listed shares, rather than through a cross-listing on other African exchanges.
The founder of the 700,000-barrels-per-day capacity plant, Mr Aliko Dangote, said in April that the refinery aims to increase production capacity to 1.4 million barrels per day.
Mr Dangote is also pursuing plans to build another refinery in Lamu along Kenya’s coast in partnership with other East African governments, although it remains unclear whether part of the IPO proceeds will be allocated to that project valued at an estimated $17 billion.
By Adedapo Adesanya
The NASD Over-the-Counter (OTC) Securities Exchange rallied by 0.89 per cent on Tuesday, August 4 amid renewed buying interest in unlisted stocks.
During the session, the market capitalisation added N24.07 billion to end at N2.739 trillion compared with Tuesday’s N2.715 trillion, while the NASD Security Index (NSI) gained 40.11 points to quote at 4,563.96 points compared with the preceding day’s 4,523.85 points.
The NASD OTC Exchange ended the trading session with two price losers and three gainers, led by Central Securities Clearing System (CSCS) Plc, which chalked up N7.80 to close at N119.80 per unit versus the previous session’s N112.00 per unit. Afriland Properties Plc increased its value by N1.27 to N23.95 per share from N22.68 per share, and Nitrox Industrial Gases Plc expanded by N1.15 to N21.15 per unit from N20.00 per unit.
On the flip side, FrieslandCampina Wamco Nigeria Plc slid by N8.64 to sell at N144.00 per share compared with the previous day’s N152.64 per share, and 11 Plc dipped by 1 Kobo to end at N225.00 per unit, in contrast to Monday’s closing price of N225.01 per unit.
Tuesday’s trading data showed that the volume of securities rose by 9.0 per cent to 1.6 million units from 1.5 million units, and the number of deals climbed by 6.5 per cent to 33 deals from 31 deals, while the value of securities dropped by 26.9 per cent to N47.6 million from N65.2 million.
At the close of trades, Great Nigeria Insurance (GNI) Plc remained the most traded stock by value on a year-to-date with 3.4 billion units worth N8.4 billion, followed by Infrastructure Credit Guarantee (Infracredit) Plc with 2.3 billion units valued at N6.5 billion, and CSCS Plc with 76.9 million units exchanged for N5.5 billion.
GNI Plc also closed the session as the most traded stock by volume on a year-to-date with 3.4 billion units transacted for N8.4 billion, followed by Infracredit Plc with 2.3 billion units sold for N6.5 billion, and Resourcery Plc with 1.1 billion units transacted for N415.7 million.
By Dipo Olowookere
A 0.38 per cent loss was suffered by Nigerian stocks on Tuesday on the back of continued selling pressure from investors embarking on profit-taking.
Data from the Nigerian Exchange (NGX) Limited showed that the contraction was influenced by the 1.78 per cent decline recorded by the insurance sector, the 0.24 per cent slip printed by the consumer goods index, and the 0.09 per cent drop posted by the energy space, offsetting the 0.75 per cent growth achieved by the banking sector and the 0.21 per cent growth recorded by the industrial goods segment.
Investor sentiment was weak during the trading day, as the bourse ended with 13 price gainers and 40 price losers, representing a negative market breadth index.
LivingTrust Mortgage depreciated by 10.00 per cent to N3.42, Multiverse also shed 10.00 per cent to N22.95, McNichols dropped 9.92 per cent to N5.45, Thomas Wyatt dipped by 9.87 per cent to N3.56, and Eterna lost 8.57 per cent to trade at N33.00.
On the flip side, AVA Capital improved by 9.94 per cent to N9.95, Livestock Feeds expanded by 9.71 per cent to N8.65, Neimeth increased by 8.43 per cent to N9.00, AIICO gained 3.47 per cent to settle at N4.18, and Oando grew by 3.30 per cent to N36.00.
A total of 1.6 billion equities valued at N28.7 billion exchanged hands in 54,160 deals yesterday versus the 923.0 million equities worth N37.9 billion traded in 72,544 deals on Monday, indicating a 73.35 per cent surge in the trading volume, a 24.27 per cent decline in the trading value, and a 25.34 per cent slip in the number of deals.
The busiest stock was Japaul, which transacted 904.4 million units for N2.7 billion. Sterling Holdings sold 54.0 million units valued at N431.9 million, FCMB exchanged 49.5 million units worth N545.9 million, Chams traded 44.9 million units for N199.2 million, and Neimeth sold 42.4 million units worth N327.8 million.
Business Post reports that the All-Share Index (ASI) gave up 927.70 points to 244,802.83 points from 245,730.53 points, and the market capitalisation receded by N599 billion to N158.016 trillion from N158.615 trillion.
