The National Petroleum Investment Management Services (NAPIMS) diverted 14% from the payments the federal government of Nigeria made to joint venture operators in 2015.
These payments were classified as “3% administrative fee”, “payment for security”, “consultancy”, “training” and other sundry costs.
All these non-cash call deductions were made without appropriation or legal backing — and they constituted about 11% of the national cash call budget and 14% of cash call paid out to JV operators for the year.
In sum, NAPIMS — the investment arm of the Nigerian National Petroleum Corporation (NNPC) — received $597.861 million from the cash call account, funded from both the CBN/NNPC JP Morgan Chase cash call dollar account and CBN/NNPC JV naira cash call account.
All these revelations are contained in the 2015 audit report of the Nigeria Extractive Industries Transparency Initiative (NEITI).
TheCable Petrobarometer understands that in previous years, NAPIMS never gave a breakdown or provided justification for the sums it collected from the cash call account.
NIETI report further revealed that NAPIMS said it paid $307.83 million to the National Intelligence Agency (NIA) and the navy for “security” — despite the hefty national security and defence budgets.
The oil industry watchdog recommended that subsequent expenditures should be funded from NNPC overhead budgets and not from the cash call budget.
“NAPIMS should operate a separate account where all administrative and overhead are paid from to allow adequate accountability,” it said.
“Payment for security expenditure amounting to US$307.83 million made to Nigerian (National) Intelligence Agency and Nigerian Navy should be discontinued and future request for security funding for oil and gas facilities should be funded from the national defence budget so as not to put unnecessary pressure on cash calls.”
The NNPC operates a cash call account to fund its own contribution to its joint venture partnerships in the upstream sector.
It currently has JV agreements with Shell, ExxonMobil, Chevron, Total and Eni.
NNPC has average of 57% interest in the JVs which account for around 90% of Nigeria’s oil output.