The Presidential Task Force on Petroleum Sector Reforms led by Mr. Nuhu Ribadu has uncovered the failure of government to meet up with its financial obligations to its joint venture partners.
The task force also discovered that the estimated cumulative deficit incurred by the Nigeria Liquefied Natural Gas between value obtainable on the international market and what is currently being obtained from NLNG, over the 10 year period, amounts to approximately US$29 billion.
According to the report of the task force obtained exclusively by LEADERSHIP in Lagos yesterday, the total outstanding arrears of the sum that should have been paid out to joint venture partners of the Nigeria National Petroleum Corporation was in excess of N459.6 billion as at December 2009.
Appraising the sector, the report also said that legislative framework guiding operations in the sector has become outdated as it does not reflect current economic realities in the country with regards to areas governing the industry and agreements with third parties.
The report said that “Since 2006, government has not allocated enough funds to cover these amounts and NNPC has entered into a range of borrowing arrangements referred to as alternative financing arrangements with the costs of financing this debt (estimated at around 8%) continuously mounting.”
According to the report endorsed by the task force chairman, Malam Nuhu Ribadu and the Secretary, Mr. Supo Shasore, the lack of proper institutional frame work prompted a situation whereby some traders lifted crude oil without being listed on the approved master list of customers who had a valid contract and were selected through an annual bidding process.
To the taskforce, this has also necessitated a situation whereby NNPC is owed N27billion amount being various types of debts by the major marketers of petroleum products.
“We also found that amounts payable to suppliers of petroleum products, as at 31 December 2011 amounts to approximately US$3.6 billion, of which US$2.7 billion represents amounts outstanding for over 365 days,” the report stated.
The Task Force also found that quite a number of traders did not demonstrate expertise in the business of crude oil trading.
“Furthermore, the Task Force found that the use of crude oil traders was contrary to the global trend