GOVERNMENT OWES NNPC FOR HELICOPTER, MARITIME
SECURITY
BORROWING RAISES DOUBTS OVER NNPC'S FUTURE
INDEPENDENCE
EARLIER REPORTS SHOW NNPC IS A VEHICLE FOR
CORRUPTION
By Joe Brock
ABUJA, July 16 (Reuters) - Nigeria's government
owes the state-owned oil firm for improper, informal loans used to cover a
range of expenses, from a presidential helicopter to maritime security, a
report of a partial audit will say.
The report, prepared by an outside organisation
given access to accounts of the Nigeria National Petroleum Corp as part of a
government effort to improve transparency at the firm, raises doubts over its
independence.
Africa's biggest oil producer and key supplier to
the United States is pinning its future oil industry hopes on turning the
debt-ridden NNPC into an independent profitable company emulating Brazil's
Petrobras or Malaysia's Petronas.
NNPC has a budget agreed by parliament. Other
revenue it collects from oil production is meant to be passed to the government
accounts, but industry experts say powerful interests tap money before it is
sent through official channels.
According to sources involved in the external
audit, it will show outstanding debts owed to the oil company by a number of
ministries and state agencies. The company paid for a $14 million presidential
helicopter, and is owed $106 million by the state power firm and $124 million
by a maritime security agency.
State governors are threatening to take the federal
government to court over illegal tapping of oil revenues that should be shared
with local government.
The finance ministry and NNPC declined to comment
on the debts and the presidency and oil ministry did not respond to requests
for reaction.
"We are aware of many of these debts,
obviously it isn't an ideal situation," an NNPC source told Reuters on
condition of anonymity.
State agencies in debt to NNPC should be funded
through the budget, so such loans add to transparency concerns.
The NNPC needs its own funds to pay for joint
ventures with foreign oil companies, some of which have lain dormant due to a
lack of state investment.
"It does highlight the extent to which NNPC
has been drawn into the more opaque areas of government - and will give
ammunition to those critics who say it has operated at least partly as a slush
fund for government," Antony Goldman, Nigeria oil expert at PM Consulting
said.
"It points to the huge difficulties in making
independent a corporation with such a complex web of assets and liabilities, at
least some of which appear not to have been contracted solely on a commercial
basis."
Numerous earlier reports and audits have concluded
that corruption has been rife within NNPC. Last year, Transparency
International and Revenue Watch ranked NNPC as one of the least transparent oil
companies in the world.
A parliamentary report in May uncovered a $6.8
billion fraud involving a government gasoline import subsidy, which is partly
run by NNPC.
That report said NNPC was accountable to no one. It
said the company owed oil traders, including privately-held Trafigura, $3.5
billion in unpaid bills.
Nigeria risks its 2 million barrel per day oil
production declining in the next few years if it fails to reduce political
uncertainty, corruption and criminality.
A long-awaited Petroleum Industry Bill (PIB), due
to go to parliament for debate within days, is supposed to spin off some assets
and replace the NNPC with a new, independent and partially listed National Oil
Company (NOC). A copy of the PIB seen by Reuters is thin on detail, however.
The draft PIB also states that the oil minister
will oversee all institutions within the industry, raising question marks over
how independent the NOC would be.
Nigerian President Goodluck Jonathan replaced the
managing director of the NNPC and three other senior directors last month in
efforts to improve transparency and accountability.
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