The governor of Central Bank of Nigeria, Godwin Emefiele, has disclosed that the country will soon commence the sale of about 15 per cent of its oil assets held by the Nigerian National Petroleum Corporation (NNPC), which is expected to yield an inflow of $10 billion to the country.

This is part of efforts to reflate the nation’s receding economy.

This is coming as the federal government has demanded $635 million from two multinational oil companies, Agip and Total, for undeclared crude oil shipped out of the country between 2011 and 2014.

Two cases have been filed at the Federal High court in Lagos by senior lawyer and Senior Advocate of Nigeria (SAN), Professor Fabian Ajogwu, who had handled several cases for the federal government on aviation, defence, energy, and financial services.

Emefiele, while speaking at an interactive session with top media executives in Lagos, said the expected income would have been up to $15 billion if the assets were sold earlier in the year.

He also disclosed that a team of consultants had been commissioned to carry out a study on the proposed sale.

Recall that business mogul, Aliko Dangote, had, at the weekend, urged the federal government to sell some national assets, saying it was a better option for the country rather than borrowing money from the World Bank or IMF. According to him, what the nation needs now is to beef up its reserves. He particularly advised the government to outright sell the Nigeria Liquefied Natural Gas Ltd.

“My own suggestion before was that they should even sell 100 per cent of NLNG. I don’t think government should be in any business of investing in sectors of LNG. A company like that, with earnings of $1.5 billion on the average, they should get anywhere between $12 billion and $15 billion,” Dangote said.

The nation’s forex market has been hit with scarcity as the nation continues to face dwindling income from sale of crude oil, the mainstay of its economy. However, the apex bank has over the past few months been managing the issue. The CBN eventually lifted its peg on the naira after about 18 months when it decided to adopt a floating policy of the currency on June 20, 2016. It had pegged the naira at N197 to $1, which put a strain on the country’s foreign exchange reserves.

Emefiele, at the session, also disclosed that the apex bank had made several adjustments in order to deepen the supply of forex in the country, which are yielding positive results. According to him, the nation’s forex market recorded an inflow of $1billion in the last two months since the liberalization of forex was carried out.

He pointed out that the only way to improve the supply of forex is to liberalise the currency and encourage portfolio investors, adding that the country recorded additional inflow of $20billion monthly into the forex market from diaspora remittances.
Also, in order to empower Nigerians as part of efforts to ease the effect of the economic hardship, the CBN governor said one million women across the nation will soon benefit from a subsidised loan under the Micro, Small and Medium Enterprises (MSMES). He added that the apex bank will continue to make such interventions in the economy as it is in discussion with relevant government officials to realise the policy.

He further revealed that the MSMEs fund had grown to N220 billion.

According to him, as an alternative to the importation of rice into the country, the rice farming programme in Kebbi, which was yielding 1.5 metric tonnes per hectare, had risen to 5.5 metric tonnes per hectare within four months, owing to the apex bank’s intervention.

He said, “Actions on the economy are deep enough. What to do when you are in a recession is to spend your way out of it. For the first time in my life, I saw the first toothpick produced in Nigeria last week in Sango Otta, Ogun State. We must embrace structural reforms.”

Emefiele further disclosed that long procurement process had been a hindrance to the government’s efforts to jumpstart the economy through its spending stimulus policy, and said the Emergency Bill sought by the president was now ready for the National Assembly.

According to him, the government needs to remove the long process of procurement so that it can go directly and spend money.

The governor noted that the federal government will stimulate the economy by spending another N370 billion-N400 billion this week to boost the economy in addition to the N420 billion that had been spent.

“About N370billion will be injected into the economy from this week. We have reached the bend and I can assure you that, going forward, you will see spending that will stimulate the economy,” he stated.

Speaking on impact of spending on inflation, he said by December 2015, the inflation rate in the country was 9 per cent but that by March 2016, it had risen to 17 per cent, adding that government needed to weigh the balance between growth and inflation.

He remarked that the president had been meeting with private sector leaders, an indication that government was ready to fraternise with the private sector.

“We are in the valley; the only direction is to go up the hill. I am optimistic that by the actions that are being taken, by the fourth quarter of this year, we’ll see result that we are moving out of recession. The worst is over,” Emefiele assured.

Meanwhile, hearing in the case between the federal government and the oil companies will begin next week before Justice Olatoregun Isola.

There are indications that Ajogwu will also be filing claims against other multinationals such as Chevron and Exxon-Mobil

According to reports by the News Agency of Nigeria (NAN), the federal government, in the two cases, is claiming $490,517,280 from Total E&P Nigeria Ltd and $145,848,102 from Nigeria Agip Oil Company Ltd.

The statements of claim filed before the court are accompanied by the sworn affidavits of three US-based professionals.

Government contends that sometime in 2014, it realised a decline in its oil export revenue. This necessitated an intelligent gathering of data, which showed that part of the reasons for the decline was the under-declaration of crude oil shipments made by some major oil and gas companies operating in Nigeria.

Professor David Olowokere, a US citizen who is the lead analyst at Loumos Group LLC, a technology and oil and gas auditing firm based in the United States of America, Jerome Stanley, a counsel in the law firm of Henchy & Hackenberg, a law firm based in United States of America and head of the legal team engaged by Loumo Group LLC, made the court statements.

The third deponent is Micheal Kanko, a citizen and resident of the State of Arizona, USA, who is the founder and the current chief executive officer of Trade Data Services Company.

It was learnt that a forensic analysis of export records from Nigeria and the import records from respective ports of entry at the United States of America used by Agip and Total showed discrepancies.

The volume of crude oil declared to have been exported from Nigeria was less than what was declared to have been imported into USA via the same shipment by the same vessel on the same bill of lading.

Some other shipments were not declared by the defendants to the requisite authorities, particularly the pre-shipment inspection agents. In some instances, the crude oil shipments were completely undeclared.

The federal government noted that all crude oil and gas shipments from Nigeria are required to be declared and inspected by pre-shipment agents appointed by the Central Bank of Nigeria (CBN) and the inspection records are to be deposited with the ministry of finance, Nigeria.

Government averred that high-technology information technology system including satellite tracking systems were deployed by consultants in gathering the various validated information establishing the shortfalls in the export declarations and the import declaration in the country of destination.

Court documents showed that 57 million barrels of Nigeria’s crude oil was illegally exported by Total, Agip, Chevron and other companies and sold to buyers in the US between January 2011 and December 2014. The revenue due to Nigeria as a result of this under-declaration and non-declaration is put at $12,722,600,327 ($12.7billion) which translates to N2,493,629,664,092 (N2.5trillion) at the rate of N197/$.

In one of the instances cited, Total shipped crude oil using a vessel named Triathlon to Tostsa Total oil Trading S.A. of San Felipe Plaza, Suite 2100,5847 San Felipe, 77055 Houston, US, at the port of Philadelphia, Pennsylvania, US with a bill of lading number TCVMTRIATIA 1388. The shipment was not declared to the relevant authorities, resulting in the shortfall of 968,784 barrels of crude oil in the value of $106,566240 as revenue to the government,
Another under-declared crude oil was estimated at 491,850 barrels with a value of $54,103,500. It was shipped aboard a vessel named North Star and sold to BP Products North America of 501 Westlake Park Boulevard, Houston, TX 77079 US, at Port of Texas City, with bill of lading DROESVD23091101.

On two different occasions 768,990 barrels of crude oil, valued at $84,588,910 was loaded on a vessel named AUTHENTIC. It was shipped to Socap International Ltd of Cannon’s court, 22 Victoria Street, Hamilton, HM12.Bermuda at the port of Chester Pennsylvanian, US bill of lading ALMYSVDM17041101 and17041102

The federal government is seeking an order of the court compelling Total E & P Nigeria Ltd to pay into the federal government of Nigeria account with the Central Bank of Nigeria, $245,258,640 being the total value of the missing revenues from the shortfall/under-declared/undeclared crude oil shipments of the federal government of Nigeria.

Government also wants the oil firm pay general damages of $245,258,640 and interest on the said sum at the rate of 21 per cent per annum until the entire sum is liquidated.

The case has been adjourned till next week for hearing.

In a separate suit, the federal government alleged that Agip on 16th June, 2014, lifted crude oil on board the vessel named VALUE. The firm shipped the cargo to Philadelphia Energy Solutions of 1735 Market street Philadelphia, PA, USA, at the port of Wilmington, Delaware, United States of America with Bill of lading number SEUK9HA21304143.

Government claims that the shipment was not declared to relevant authorities resulting in the shortfall of 175,334 barrels of crude oil in the value of $38,573,561 as revenue to Nigeria.

It further claimed that on June 27, 2011, Agip lifted crude oil on board a vessel named COSMIC and shipped same to Eni Trading & Shipping B.V. of Strawinskylaan 1641-Tower C/16 1077C XX. Again, government claims that the shipment was not declared to the relevant authorities resulting in a shortfall of 467,614 barrels of crude oil in the value of $107,274,990 as revenue to the government.

It was learnt that despite letters written by the legal representative of the federal government for payment of the shortfall, the company had failed to make any payments to the federal government.

The federal government, in suit, demanded interest rate of 21percent per annum until the entire sum is liquidated, in addition to general damages in the sum of $145,848,551 and the cost of the legal action.

 

Source: www.allafrica.com