Thursday, July 24, 2008

Disturbing Article: Paying Off Militants

The following article illustrates how warped things have become in the Niger Delta: a major nationalized oil company has openly admitted to paying off militants so they can make repairs on their oil facilities.

NNPC Paid Militants $6 Million, Says GMD

This Day (Lagos) NEWS
23 July 2008
By Stanley Nkwazema Abuja

The Nigerian National Petroleum Corporation (NNPC) said yesterday that it paid Niger Delta militants $6 million in order to allow it repair the Chanomi Crude oil pipeline in Delta State.

The Corporation also said that a total of $77.031 billion or N3.930 trillion was generated between January 2003 and March 2008. Out of the amount, it said, the Corporation remitted the sum of $56,222 billion or N3.930 trillion to the federation account.

The House of Representatives Committee investigating the non remittance of revenues into the Federation Account also revealed yesterday that 60 percent of the work so far done has confirmed that Ministries, Departments and Agencies of the Federal Government generated over N3.56 trillion naira between January 2003 but paid only N1.36 trillion into the Federation account within the same period.

The Chairman of the Committee Honourable John Ewah Enoh who spoke yesterday at the resumed hearing of the committee said the money could have boosted the budget of the federation if there were enabling laws to curtail the MDAs from spending their excess funds.

The Acting Group Managing Director of the organisation, Engineer Lawal Abubakar Yar'Adua confirmed to the House Committee on Finance that the NNPC paid $6 million ransome militants which gave them the lee way to repair the Chanomi Crude Oil Pipeline in Delta state.

"The price we are also paying in the Niger Delta is higher in terms of insurance as they demand higher because of the risks involved. It is very difficult to get expatriates to work in that area".

"For instance, we paid the militants who are also there. In the Chanomi Creek we negotiated with them and they said we should pay $100 million. But we negotiated with them and came down to $6 million because we were losing $81 million due to the problem of ruptured pipelines in the Chanomi Creek which supplied Crude to the North", he said.

On refinery allocation, Yar'Adua also said that though there is "no such thing as refinery allocation since 2003, the NNPC buys its crude at the same international market like others

He said the Nigeria Petroleum Development Company (NPDC) its oil exploratory arm "went out of production for eight months due to the activities of the militants in the Niger Delta, but it is back and producing 686,000 bpd. We are talking to the militants. The NPDC is the real source of revenue to the NNPC. They are bringing revenue to the country."

On the refusal of the Federal government to subsidise the price of diesel as it had done in Petrol and kerosene, Yar'Adua put the blame on the government of President Olusegun Obasanjo.

He said "NNPC is the one handling the subsidy. We were not given any subsidy as we have in PMS. NNPC is still selling diesel at N61.50 which is a heavy loss. We are losing money and we can not raise prices because we are government owned.

Very soon, if care is not taken NNPC may collapse, because we are selling at a loss", he said.

The document he presented to the House shows that in 2003, 267,330,574 barrels were produced worth $7,758,503,500.30. In 2004, a total of 301,046,631 barrels worth $11,506,679,964.27 were produced. In 2005. a total of 295,472,471 barrels worth $16,302,777,292.03 were produced, while in 2006, a total of 229,890,166 worth $14,983,197,473.01, were produced. He said in 2007, a total of 202,461,413 barrels worth $15,232,995,318.38 while between January 1 to March 2008 the NNPC produced 47,853,785 worth $4,754,684,156.78.

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