The Nigerian National Petroleum Cooperation (NNPC) has begun the process of recovering over $7 billion in overdeducted tax benefits from Joint Venture Partners on major capital projects in the first 100 days of President Buhari’s government.
In a report submitted to President Muhammadu Buhari by its new management detailing its successes so far, the Group Managing Director of NNPC, Ibe Kachikwu had commenced Performance Measurement & Benchmarking as well as Value for Money Review of NNPC and the Joint Venture Companies covering the period 2008 – 2013.
According to a statement issued yesterday by Senior Special Assistant to the President on Media and Publicity, Garba Shehu, the report indicated that the process may lead to further cost recovery.
The report further said a reputable International Accounting Firm has been engaged by the NNPC to ascertain the exact amount due to government on the Strategic Alliance Contracts entered by Nigerian Petroleum Development Company (NPDC), where up to $2.46 billion of government money is to be recovered.
It also revealed that consequent upon an extensive investigation of the various toxic crude oil for refined products swap contracts, a total sum of $420 million has so far been reconciled in favour of NNPC and is now due for recovery from the legacy OPA/SWAP contracts.
Out of the reconciled amount, the sum of $277 million has been recovered in lieu of products and the recovery effort is still ongoing.
According to the report, Kachikwu is committed to continued review of all existing contracts and addressing the ones that are not favourable to the Corporation.
It was noted that significant cost reductions are also expected to ensure the Corporation remains profitable in the prevailing low crude oil price regime.
The report also disclosed that progress was being made toward bringing back the nation’s refineries to full production, noting that the management of the NNPC was working to ensure that this happens before the end of the year.
According to the report said If this is completed, it is expected to achieve an annual savings of about $1billion worth of foreign exchange from fuel import substitution and additional total saving of over $500 million annually would be made from the petrochemical products of Kaduna Refinery and Petrochemical Company.
The report also disclosed that efforts at repositioning the NNPC have started yielding result on the nation’s economy.
It further said gas supply to the power plants that had hitherto been handicapped by the supply of much-needed gas, has improved significantly from about 630 to 861 million standard cubic feet per day, which has resulted in a more steady power supply being witnessed in the country.
The report also disclosed that gas supply for power and peak generation have in recent times reached a historical high of 876 million standard cubic feet per day and 4,782 Mega Watts respectively.
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