The Central Bank of Nigeria (CBN) has frozen the accounts of the Nigerian National Petroleum Corporation (NNPC) and its joint venture partners in deposit money banks, creating panic among some companies in the Oil and Gas industry.
This follows on the heels of the Federal Government’s decision that all moneys accruing to its agencies be paid into a Single Treasury Account (TSA) for the purpose transparency and accountability.
Nigeria, through the NNPC, operates oil joint ventures with multinational companies including Shell, ExxonMobil, Chevron, Total and Eni, which account for almost half of Nigeria’s oil output.
To achieve smooth opertions in these areas, joint venture accounts, where the NNPC contributes between 55 and 60 percent and the partners contribute 40 percent was set up.
Some industry stakeholders say these accounts cannot be affected by the TSA rule because of their peculiar upmake and purpose, while others say government needs to more clearly define the ambit of the TSA for clearer understanding and the avoidance of doubt so that unscrupulous individuals or groups do not misapply or exploit it.
The freezing of the accounts took place on Monday last week and has affected the operations of the oil companies, as it has been difficult for them to access their daily operational funds since then.
Many contractors to the Joint Venture companies could not be paid because of this . However it was not only the joint venture companies that were affected, as subsidiaries of the NNPC , such as the Nigerian Petroleum Development Company (NPDC) the exploration arm of NNPC and others that require daily financial transactions were affected.
The CBN, BusinessDay learnt is thinking that the accounts were being operated by NNPC alone.
Industry sources said because of the seriousness of the action by CBN and the likely backlash it would generate, a meeting between the apex bank and representatives of the joint companies was arranged on Thursday last week with the aim of clarifying and resolving the matter.
It was learnt that at the meeting, the joint venture operators explained to CBN officials that though the joint venture accounts belong to both the NNPC which contribute between 55 and 60 per cent and its partners which contribute about 40 percent, it technically does not belong to the NNPC alone.
The accounts are operated by the joint venture partners after the NNPC must have approved the budgets.
It was further stated that if the accounts are put under TSA, it would be difficult for the joint venture partners which operate the assets to work and make returns to government.
It was learnt that the representatives of the companies were emphatic that the exploration and production (E and P) account could not be placed under the TSA .
Contacted, Ohi Alegbe, the group general manager, Public Affairs of the NNPC said he was not aware of the CBN action. Alegbe added that the corporation has complied with the directive of TSA.
He however said that if the CBN did so, it should be asked why it took the action on an account that should have been excluded from the TSA.