Group Managing Director Nigerian National Petroleum Corporation (NNPC Mele Kyari at the weekend stated that the ₦287bn it posted earlier as profit after tax in the 2020 financial year was as a result of some unprecedented fiscal disciplinary measures it embarked upon.
The clarification was coming hours after the corporation had for the first time since its establishment 44 years ago claimed to have made an after taxation profit of N 287 billion.
This was disclosed in a statement signed by NNPC’s acting Group General Manager, Group Public Affairs Division, Garba Deen Muhammad
Earlier on Thursday President Mohammad Buhari, who doubles as the Petroleum minister explained that NNPC losses were reduced from N803 billion in year 2018 to N1.7 billion in year 2019, paving way for the eventual declaration of net profit of ₦287bn in year 2020, adding that the declaration was “in fulfillment of an earlier pledge by the federal government to publicly announce the financial position of the corporation.
The clarification was coming hours after the corporation had for the first time since its establishment 44 years ago claimed to have made an after taxation profit of N 287 billion.
This was disclosed in a statement signed by NNPC’s acting Group General Manager, Group Public Affairs Division, Garba Deen Muhammad
Earlier on Thursday President Mohammad Buhari, who doubles as the Petroleum minister explained that NNPC losses were reduced from N803 billion in year 2018 to N1.7 billion in year 2019, paving way for the eventual declaration of net profit of ₦287bn in year 2020, adding that the declaration was “in fulfillment of an earlier pledge by the federal government to publicly announce the financial position of the corporation.
But, since the declaration if the said humongous profit, some analysts and other Nigerians have continued to foubt the suthenticity of the claim of an organization whose major preoccupation has been importation of fuel and o ayment if subsidies.
For instance, the founder of IBTC Stanbic Bank and a foremost investment banker in Nigeria, Atedo Peterside, has challenged the NNPC to clarify allegations that it dipped its fingers in the federation account in order to announce the N287bn as the profit.
According to Punching.com, peterside, in a tweet on Sunday, said, “There is an allegation that NNPC dipped their fingers in the Federation Cookie Jar in order to announce bumper 2020 profits; they should come clean and publish details of all dividends received by them and tell us which ones they recently diverted from the Federation to themselves.”
In fact, reacting to Peterside’s tweet, @DrJoshObi said, “I read a while ago that the FG recently approved some billions for turnaround maintenance, maybe they recorded it as ‘inflow’.”
@ayotula said, “I knew something was wrong, NNPC for the first time declared profit and next says it wants to sell shares.
“I knew it was stage managed because of the provisions of the PIA. It is expected that NNPC would have made profits for some years before thinking of shares.”
@FAGalileo said, “PIA signed into law and the next big announcement is NNPC declaring profits for the first time in 44 years. Who is fooling who?
“The @NNPCgroup should publish the subsidiary and its activities that produced this huge profit margin. Or was this done for the 30 per cent frontier basin?”
According to another analyst, who identified himself as
Dr Nnaemeka Obiaraeri, he wrote that the nation’s oil company should provide details of how it moved from a loss position of N1. 7billion in 2019 to a humongous profit if N287billion within two years.
They argue that the balance sheet may have been manipulated through consolidating corporate actions of independent entities, which they regard as the height of deceit
According to Obiaraeri, he challenge the president as Petroleum minister and his appointed GMD to point to any productive or trading activities that was executed in 2020 to generate and report such huge profits of N287bn in 2020 after a consistent 6 years loss positions ( 2015 to 2020).
Friday Ameh, energy analyst says that it is either they reported bubble paper profit to enable them debit a ledger for a particular nefarious game or they engaged in unwholesome balance sheet engineering games.
Obiaraeri corroborated Peterside’s assertion as he further argued that what Kyari Presented as profit from direct NNPC operations and activities is actually a retention of 20% of the profits and dividends paid by independent entities, which the NNPC received on behalf of the federation ( FGN, States and LGAs). This is the first time they are allowed to retain such.
According to a reliable source, before now, the FGN and the states used to collect 100% of all the dividends paid by these independent entities .
However, in 2020, the NNPC decided to retain the 20% from the dividends paid the NLNG, the NGC, the West African Gas Pipeline ( Operated by Chevron) etc and consolidated same in their balance sheet.
“So, what they reported were retained portions of the dividends paid by other entities for the Federation. All the poppycock by Melee Kyari of improving efficiency at the NNPC and cut cutting cost measures over the last one year are just hogwash . NNPC as an entity under him, its operations and that of the three refineries are cesspool of losses and perfidy . Don’t be deceived by their tales by moonlight.
“It is a grave affronts to our sensibilities and intelligence for these guys to receive about $2.5billion/N1trillion (using CBN official rates) as combined dividends on behalf of the federation from independent entities established by acts of Parliament for the benefits of the federation, consolidate the retained 20% portion of dividends meant for the Federation accounts and then report it (N287bn) as profits made from the activities of a corporation that did nothing, other than , import pms at a loss under subsidies and ignorant people clap away without asking questions,“ he said.
Some other analysts who spoke with Metrobusinessnews challenged some reputable auditing firms in the country to consider this as a national assignment for the benefit of their cherished profession to fish out the 2019 audited financial reports of the NLNG; West African Gas Pipeline Company ( Operated by Chevron); Nigeria Gas Company(NGC); Duke Oil; NPDC; Bonny Transport Company and Wheel Insurance, among others and juxtapose with announced result and tell Nigerians the true situation of things.
Specifically, they further claim that when all their dividends for the year ended 2019, which was declared, paid and transfered to the NNPC accounts in 2020 on behalf of the federation , one will get in excess of over $2.5bn/N1trillion (using the CBN official rate), a pointer to the allegation that the report may have been manipulated.
