THE Nigerian National Petroleum Company Limited’s (NNPCL) indebtedness denial may have stirred up a hornet’s nest over the company’s undisclosed records and delay in listing on the Nigerian stock exchange.

A media report had alleged that the NNPCL owed $6.8 billion to international oil traders which the company denied but contradicted itself.

In a statement on Sunday, August 18, its chief Corporate communications officer, Olufemi Soneye, claimed that the NNPCL does not owe the sum of $6.8 billion to any international trader(s).

“In the oil trading business, transactions are carried out on credit, and so it is normal to owe at one point or the other.

“But NNPC Ltd., through its subsidiary, NNPC Trading, has many open trade credit lines from several traders. The company is paying its obligations of related invoices on a first-in-first-out (FIFO) basis,” Soneye stated.

While Soneye’s quote appeared contradictory, it begged the questions about the disclosure of NNPCL’s financial records and delay in listing on the stock exchange.

In March 2024, the group chief executive officer of NNPCL, Mele Kyari, raised public anticipation for the listing of the company’s shares on the stock market as provided for in the Petroleum Industry Act (PIA), after earlier promises, without giving a definite timing.

He said the company would list soon when he participated at the international oil and gas players meeting at the 2024 CERAWEEK in Houston, United States.

Earlier in July 2023, at the Nigeria Oil and Gas Energy Conference and Exhibition held in Abuja, Kyari said the NNPCL planned to issue its Initial Public Offer(IPO) to investors soon.

The ICIR can report that at the unveiling of the NNPCL as a commercial entity in July 2022, Kyari had said the company would be ready to list its shares on the stock exchange by the middle of 2023.

His yet-to-be-fulfilled promise came shortly after the NNPC became a limited liability company on July 1, 2022, after former President Muhammadu Buhari signed the PIA.

In the statement on Sunday, Soneye also refuted the report’s claim that it has not remitted revenues to the federation account since January, among other issues.

He claimed it was incorrect to say that NNPCL has not remitted any money to the Federation Account since January, asserting that NNPCL and all its subsidiaries remit their taxes to the Federal Inland Revenue Service (FIRS) regularly in addition to payments of company income tax (CIT) to road contractors under the Road Investment Tax Credit Scheme.

“In all, NNPC Ltd. is the largest contributor to the tax revenue shared every month at the Federation Account Allocation Committee (FAAC),” he said.

NNPCL contradicts self

Commenting on the NNPCL’s statement, an energy expert, Kelvin Emmanuel, said that the state-owned firm contradicted itself over the alleged debt.

NNPC’s failure to pay either through cash or equity in feedstock drills a hole into Nigeria’s purse

He noted that in the oil business, transactions are carried out on credit and it is normal to owe at one point or the other.

“In one breath, you’ve denied owing traders, and in the same statement, you’ve acknowledged owing,” Emmanuel pointed out.

He explained that it takes 60 trading day transactions for NNPCL’s balance sheet to read as payables to international traders for crude oil swap deals.

He said based on the modified carry agreements signed, there’s a clause that specifies that if payments were not made in 60 days, the trader is to apply a London Interbank Offered Rate (LIBOR) of between 1.5 to two per cent and add a country risk premium of five per cent (based on the risk profile of Nigeria).

“I did that calculation and it came to $ 476 million per annum for 7 per cent of $6.8billion. If we prorate that annual rate, you’ll arrive at $1.3million in interest per day as demurrage for not paying your T-60 when due.

“Can you now see that the failure to pay either through cash or equity in feedstock will drill more holes in the finances of the country you’re supposed to be supplying with royalties based on sections 64(c) of the PIA,” Emmanuel explained.

He maintained that the NNPCL had not remitted royalties to the federation account since January, stating that taxes to FIRS were different from royalties to the federation account.

“If you want to be transparent to the media, let your board order for an external forensic audit of your accounts for the last 20 years,” Emmanuel made the call on the NNPCL to prove its transparency and accountability.

Nigerians react

A mixed reaction has however trailed NNPCL’s denial of the allegations.

An X user, Baluma Bukar, said, “NNPC Limited’s proactive and transparent response to the allegations is a breath of fresh air! Their willingness to address concerns and provide accurate information shows a genuine commitment to accountability and integrity.”

On the other hand, another X user, Agbalaka, queried, “Why would they owe any money when they have been selling the oil well in advance since Buhari was the petroleum minister?”

Another user, @Farouq_SG, tweeted, “The rate of damage control you guys are putting out these days is embarrassing. Too much damage control only means that you are not being transparent enough. You need to do better.”