Following the controversy surrounding the retention of dividends paid by the Nigeria Liquefied Natural Gas (NLNG) Company Limited to the Nigerian National Petroleum Corporation (NNPC), it has emerged that the initial directive to retain its 49 per cent share of dividends was actually given by former President Olusegun Obasanjo when he was in office.


Arising from this is another brewing controversy as to whether the dividends belong to the Federation Account for sharing amongst the three tiers of government, or just to the federal government, in this case the NNPC.


The previous management of NNPC when Obasanjo was in office had argued successfully that while the taxation revenues of NLNG belong to the Federation Account, the dividends belong to NNPC, which needed the dividend payments to reinvest in the new trains of NLNG.


It was on this basis that Obasanjo ruled in their favour and the Jackson Gaius-Obaseki-led NNPC then ring fenced the dividends in a special (investment) account and used it to successfully reinvest in NLNG Trains 3 to 6 without recourse to the federal government, according to officials familiar with the transaction.


But with the state governors seeking more revenues, they are today insisting that they were short changed by the Goodluck Jonathan administration in not paying the dividends to the Federation Account for sharing amongst all tiers of government.


In reinforcing the narrative of state governors, the Nigerian Extractive Industries Transparency Initiative (NEITI) also recently disclosed that NNPC had failed to remit $11.6 billion to the Federation Account, which was paid by NLNG and called on President Muhammadu Buhari to recover the amount.


NLNG was set up as a joint venture company comprising NNPC with 49 per cent equity, Shell, which serves as its operator - 25.6 per cent, Total LNG Nigeria Limited - 15 per cent and Eni  - 10.4 per cent, as its shareholders.


However, it is not clear if NNPC’s equity in NLNG was paid for by the “federation” or the “federal government” as this was done during the military regime of the late General Sani Abacha when it was basically a command unitary government.


A Final Investment Decision (FID) was taken on NLNG by its shareholders in November 1995, while the construction of the gas transmission system, and second and first trains were completed in September 1998, August 1999 and February 2000 respectively.
Since then, it has built four more trains between November 2002 and December 2007 to bring the total number of trains to six.


The base project (Trains 1 and 2) which cost $3.6 billion, was financed by NLNG's shareholders. The third train (expansion project), including additional storage, cost $1.8 billion and was funded by shareholders as well as reinvested revenue from the base project.
The NLNG Plus project (Trains 4 and 5) cost $2.2 billion and was funded with a combination of internally generated revenue and third party loans amounting to $1.06 billion.


Train 6 (NLNG Six project) cost $1.748 billion and financing was handled by shareholders, bringing the total cost of building six LNG trains to $9.348 billion.


The FDI for Train 7, however, has still not been taken despite efforts by NLNG to get the federal government to give NNPC the green light for the next train.


But THISDAY checks revealed that NNPC currently has some $7.3 billion dollars in the investment account with which it intends to fund its share of NLNG Train 7, Brass LNG (in which over $1 billion has already been invested) and OK LNG, which is still troubled by economic and investment hurdles.


But governors at the last National Economic Council (NEC) meeting determined that the dividends belong to the Federation Account and must be shared amongst all tiers of government.


It is not clear what the final decision of Buhari will be but oil industry experts and NNPC officials have cautioned that should the funds be shared and spent, there will have no funds to reinvest in gas at a time when the future of oil revenues is uncertain and oil prices are at an all time low.


Providing insight on Obasanjo’s directive, a retired senior executive of NNPC confirmed that the corporation was asked to retain the dividends paid by NLNG in order to meet its share of investment after FDIs had been taken to build subsequent trains of NLNG.
“As you are aware, from the Abacha days, Nigeria was already having problems funding its share of cash calls for the joint venture oil contracts with the oil majors.


“So in order to avoid a situation whereby NLNG’s expansion was impeded by the same problem, Obasanjo directed that we retain the dividends paid by the company for its expansion programme,” he said.


He added that the former president’s directive was implemented to the letter because it was in the interest of Nigeria to continue to harness its gas resources, as gas is the future, and today it is saving the country in the depressed crude oil environment.
“Besides, Nigeria is more of a gas producer than an oil producer, so we deemed the directive as a life saver for NLNG and Nigeria’s future,” he explained.


Officials of NNPC also confirmed THISDAY's investigations that the corporation currently has about $7.3 billion from NLNG dividends but the money has been kept aside for investment in NLNG Train 7, Brass and OK LNG.


Another official also expressed concern that at the last NEC meeting, the governors had insisted that all funds from NLNG should be paid into the Federation Account, adding: “If we do not reach a compromise with the governors, when we have to fund our share of Train 7 and other LNG projects, we will encounter the same difficulties we encountered with the JV cash calls, but we believe the issues will be resolved as NNPC becomes more transparent with its operations and opens its books to scrutiny.”


Given its pioneer status in 1999 when it commenced production, NLNG was granted a tax holiday for several years by the federal government and did not start to pay taxes until 2014.


According to the information on its website, in 2014, it paid N220 billion (about $1.375 billion using N160/$ as exchange rate) to the Federal Inland Revenue Service (FIRS) while its second tax payment of $1.6 billion was in June this year and shared by the three tiers of government in July. It was this payment in July that opened the eyes of state governors to NLNG’s revenue and are thus seeking more than the tax revenue from the company.


NLNG tax payments so far make it the highest taxpayer in Nigeria and sub-Saharan Africa.
In terms of dividends to its shareholders, the company has paid $30 billion between 2004 and 2014, putting NNPC’s share of dividends at $14.9 billion to date.
http://www.thisdaylive.com/articles/how-obasanjo-ordered-nnpc-to-retain-nlng-dividends-to-fund-new-trains/218287/
Cc lalasticlala. Ishilove

If this news is true, OBJ erred and it's a sign of abdicating his responsibility. It's wrong for any agency of the government, especially the most vital one at that (NNPC) to be allowed to be run as a separate entity by allowing it to keep such dividends.

However, it is not clear if NNPC’s equity in NLNG was paid for by the “federation” or the “federal government”

The decision is bad even if the equity was paid for by the federal government and even worse if by the "federation".

ovadoze:
Any probe that does not start from 1999 and even beyond is hogwash and people should understand the intricacies of governance before they open their mouth and say rubbish, now we know where it all started from, this is a case of calling a dog bad name to kill it, I know that one day God will vindicate GEJ.
I know you will call me a wailer when u have nothing meaningful to contribute

Buhari does not have all the time in this world for probing. He doesn't have to.

To you and you like, PMB must probe all or not probe at all. Let's assume he can't probe all (which is not possible anyway), he should then forget about probing anyone and we "move on" as we used to. Thereafter it doesn't matter to anyone any longer if Buhari and his team continue the looting with reckless abandon as has been our practice.

Jonathan had the opportunity to probe OBJ but chose not to. So, it's PMB's prerogative to probe GEJ or not to. It's not going to happen just because you feel it must.

[quote author=SenseiX post=
However, it is not clear if NNPC’s equity in NLNG was paid for by the “federation” or the “federal government” as this was done during the military regime of the late General Sani Abacha when it was basically a command unitary government

http://www.thisdaylive.com/articles/how-obasanjo-ordered-nnpc-to-retain-nlng-dividends-to-fund-new-trains/218287/
Cc lalasticlala. Ishilove
[/quote]

For me, this is where the main issue is, you can't dish out a report like this without establishing who provided the fund for this investment, so as to know if the parasitic state governors or Fed govt has a good claim

Any probe that does not start from 1999 and even beyond is hogwash and people should understand the intricacies of governance before they open their mouth and say rubbish, now we know where it all started from, this is a case of calling a dog bad name to kill it, I know that one day God will vindicate GEJ.
I know you will call me a wailer when u have nothing meaningful to contribute

PassingShot:
If this news is true, OBJ erred and it's a sign of abdicating his responsibility. It's wrong for any agency of the government, especially the most vital one at that (NNPC) to be allowed to be run as a separate entity by allowing it to keep such dividends.


The decision is bad even if the equity was paid for by the federal government and even worse if by the "federation".

I don't see anything wrong with OBJs directive for nnpc to keep their share of the dividends for the sole purpose of re-investment because that is the only way the gas sector will grow and in future generate more funds for the three tiers of govt to share if they like. The problem is the corruption in nnpc which has made these monies disappear overnight and no one is being held culpable for it. Rid nnpc of corruption and give them d power to operate without fg interference and they will make u money....in an ideal Nigeria by d way.

I agree with the position of the state governors. Nigerias share of the NLNG dividend belongs to the federation and not the federal government. The gas been explored by NLNG is a natural resources that belongs to the Nigerian federation and not federal government alone. If the dividends will be kept for future investment, it should be a joint decision between the federal and state governments.

baba keep shut let buhari work

Evil Devilish old Demon

All these politicians be G-boys

Its very funny when you see or hear the way these people pronounce this billions.... They pronounce it like its small money.... I dunno what to say to this..... In another news....

Happy birthday to me....

k

Space booked

Of what value is this nonsense now?

Obasanjo is still in the news? what for is Ota related to NNPC?

K

Corrupt leaders

freeradical:
I don't see anything wrong with OBJs directive for nnpc to keep their share of the dividends for the sole purpose of re-investment because that is the only way the gas sector will grow and in future generate more funds for the three tiers of govt to share if they like. The problem is the corruption in nnpc which has made these monies disappear overnight and no one is being held culpable for it. Rid nnpc of corruption and give them d power to operate without fg interference and they will make u money....in an ideal Nigeria by d way.

For the purpose of clarity, NLNG is owned by four shareholders, namely, the Federal Government of Nigeria, represented in the shareholders' structure by the Nigerian National Petroleum Corporation, NNPC (49%), Shell Gas BV, SGBV, (25.6%), Total LNG Nigeria Limited (15%), and Eni International (N.A,) N. V. S. a. r. l (10.4%).

http://www.nlng.com/Media-Center/Lists/Press%20Releases/DispForm.aspx?ID=3&ContentTypeId=0x010400C761BBE83D1A3048BEBDA73F6147B805

Obasanjo clearly erred by ringfencing the dividends, although those State Governors should stop being lazy and generate their own revenue.

obasanjo, still has a grip of nigeria

Obasanjo ran a different government and Jonathan ran also a different. If Obasanjo too a bad decision it does not mean Jonathan will also take same decision.
The actions of both government should be treated differently.

u mean St Obasanjo?

I just dey observe

And some people has being calling GEJ all sorts of names...little by little the truth would begin to come out!!!

Yea...Let them keep exposing themselves. Sai Baba.

seunmsg:
I agree with the position of the state governors. Nigerias share of the NLNG dividend belongs to the federation and not the federal government. The gas been explored by NLNG is a natural resources that belongs to the Nigerian federation and not federal government alone. If the dividends will be kept for future investment, it should be a joint decision between the federal and state governments.

I don't agree with their position. they have been talking about sharing without investing. they are bunch of rogues, charlatans

PassingShot:
If this news is true, OBJ erred and it's a sign of abdicating his responsibility. It's wrong for any agency of the government, especially the most vital one at that (NNPC) to be allowed to be run as a separate entity by allowing it to keep such dividends.


The decision is bad even if the equity was paid for by the federal government and even worse if by the "federation".

r u saying gej wasnt n isnt the corruption thingy been song in the country lately?
Oh i forgot diezani must be jail cos she diverted nlng funds.

Obj ah ahn

OBJ...d yorobberr monkey

d south wasterner

d yellow bastard

IbokUtoroh:

r u saying gej wasnt n isnt the corruption thingy been song in the country lately?
Oh i forgot diezani must be jail cos she diverted nlng funds.

open your eyes bro. #Apieceofadvice

Crappy people