CBN: Crude Oil Production Rose to 1.93mbpd in August

• Corporate bodies fueling corruption in host countries, says Malabu oil deal prosecutor

Ejiofor Alike and Obinna Chima with agency reports

Nigeria’s crude oil production, including condensates and natural gas liquids, stood at 1.93mbpd or 59.83 million barrels in August 2019, according to the latest monthly economic report of the Central Bank of Nigeria (CBN).

In the report for August 2019, the aforementioned estimate represented an increase of 4.3 per cent, compared with the 1.85 mbpd or 57.35 million barrels produced in the preceding month.

The release of the data came just as the Chief Prosecutor at the ongoing trial of criminal suspects associated with the controversial Malabu oil deal, Francesco Greco, accused corporate organisations, including those in Nigeria, of investing in corruption to cripple local economy, thus fueling poverty and chaos.

In the CBN report for August, crude oil export was estimated at 1.48 mbpd or 45.88 million barrels, representing an increase of 5.7 per cent, compared with 1.40 mbpd or 43.40 mb recorded in the preceding month.

The allocation of crude oil for domestic consumption was 0.45 million barrels per day or 13.95 million barrels in the review month.

However, the average spot price of Nigeria’s reference crude oil, the Bonny Light at the end of August 2019, decreased to $61.05 per barrel, compared with $66.23 per barrel recorded in July 2019.

This, according to the report, represented a decline of 7.8 per cent below the level in the preceding month.

The fall in crude oil price was attributed largely to slow demand for crude oil in the global crude oil market.

“The UK Brent, at $58.80/b and the Forcados, at $60.82/b, and the WTI at $54.70 per barrel, exhibited similar trend as the Bonny Light.

“The average OPEC basket of 15 selected crude streams was $59.74 per barrel in August 2019. This showed a decrease of 7.7 per cent and 17.3 per cent below the $64.71 per barrel recorded in the preceding month and the corresponding period of 2018,”the report stated.

It added that at N879.39 billion, the federally-collected revenue (gross) in August 2019 fell below the monthly budget estimate of N1.246 trillion by 29.4 per cent. It also fell below the receipt of N931.93 billion in the preceding month by 5.6 per cent.

The decrease, relative to the monthly budget estimate, according to the report, was attributed to the shortfall in both oil and non-oil revenue.

“Oil receipts at N484.75 billion or 55.1 per cent of total revenue was below the monthly budget of N798.83 billion by 39.3 per cent. However, it exceeded the receipt of N387.74 billion in the preceding month by 25.0 per cent.

“The decrease in oil revenue relative to the monthly budget was attributed to shut-ins and shut-downs at some NNPC terminals due to pipeline leakages and maintenance activities.

“Similarly, at N394.64 billion or 44.9 per cent of total revenue, non-oil receipt was below the monthly budget of N447.24 billion and the preceding month’s earning of N544.19 billion by 11.8 per cent and 27.5 per cent, respectively.

“The drop in collection relative to the monthly budget was due to the decline in revenue from Corporate Tax and Federal Government Independent Revenue,” it explained.

The report stated that of the total sum of N703.15 billion retained in the Federation Account, the sums of N90.39 billion, N8.33 billion, and N19.16 billion were transferred to the VAT pool account, federal government independent revenue, and ‘Others’, respectively, leaving a net balance of N585.27 billion for distribution to the three tiers of government.

A breakdown of this amount showed that the federal government received N285.77 billion, while the state and local governments received N144.94 billion and N111.75 billion, respectively.
The balance of N42.82 billion was shared among the oil producing states as 13 per cent Derivation Fund.

Furthermore, the report showed that currency-in-circulation, on month-on-month basis, fell by 0.5 per cent, to N2.003 trillion at the end of July 2019, compared with the decline of 4.6 per cent and four per cent at the end of the preceding month and the corresponding period of 2018, respectively.
The development relative to the preceding month, reflected the fall in its currency outside banks component.

“Deposits of banks and the federal government with the CBN, on month-on-month basis, declined, while deposits of the private sector with the CBN rose relative to the levels at the end of the preceding month.

“Overall, aggregate deposit at the CBN declined by 8.1 per cent to N14,710.27 billion at end July 2019. Of the total deposits at the CBN, the shares of the federal government, banks and the private sector were 41.5 per cent, 37.2 per cent and 21.3 per cent, respectively,” it added.

Also, total assets and liabilities of commercial banks amounted to N40.176 trillion as at the end of July 2019, showing 1.4 per cent increase, compared with the level at the end of the preceding month.
Funds were sourced, mainly, from sale of foreign assets, increased demand deposits and unclassified liabilities. The funds were used mainly, to increase claims on the federal government and private
sector.

Corporate Bodies Fuelling Corruption in Host Countries, says Malabu oil deal prosecutor

Meanwhile, the Chief Prosecutor at the ongoing trial of criminal suspects associated with the controversial Malabu oil deal, Francesco Greco, has accused corporate organisations, including those in Nigeria, of investing in corruption to cripple local economy, thus fueling poverty and chaos.

Greco is leading the prosecution of Shell and Eni, the two oil giants said to have played leading roles in the controversial Oil Prospecting Lease (OPL) 245 deal.

Greco, who spoke in Milan at the presentation of the 2018 Social Responsibility Balance Sheet of the judicial offices of the Lombard capital, said corrupt corporate organisations now invest heavily in corruption in order to cover up their ugly tracks.

“In Milan we are full of proceedings for international corruption and we see the negative effects, both against the victim states and against our companies that instead of investing in innovation, invest in bribes,” he said.

His statement was seen as an open indictment of the oil companies involved in the Malabu oil deal.
“Companies invest more in bribes than innovation” exposing what he called the ‘occult contract’ that binds corrupt representatives of governments and managers of international companies. The radical statement of the prosecutor has been received by several anti-corruption groups across the world.
Greco said further “at an international level, colonialism has been gradually replaced by the corruption that has supported corrupt and dictatorial regimes, plundering the resources of countries for a few pennies at the expense of the democratic, economic and social development of entire populations maintained at the level of poverty and forced to emigrate by hunger”.

Reacting to Greco’s statement Chairman, Human and Environmental Development Agenda, (HEDA Resource Centre), Mr. Olanrewaju Suraju, the Nigerian anti-corruption group pushing the prosecution of the suspects, said the position of the prosecutor exposed the “ignoble chain of corruption and the global conspiracy of local and international officials whose shameful conducts continues to keep Nigerians at the backbench of economic and industrial transformation”.

Foreign anti-corruption experts currently in Nigeria, Antonio Tricarico and Nick Hildyard have praised the Prosecutor for his position. The two are currently in Nigeria training selected Community-based Organisations (CBOs), journalists and representatives of anti-corruption agencies on strategies for tracing illicit funds and assets.

The prosecutor had said “In other words, this system is not limited to damaging their business or reputation, but constitutes a consolidated mechanism that directly or indirectly affects the population of the countries involved, plundering the resources necessary for socio-economic development and consequently worsening their living conditions”.

According to him, the “vicious circle, which the activity of the Public Prosecutor’s Office is committed, within its own sphere of competence, to fight is referred to by the so-called ‘curse of resources’”.

Eni had disclosed that the United States Justice Department had closed its investigations into the alleged corruption by oil major in Nigeria without taking any action.
Eni is currently on trial in Milan on graft allegations revolving around the acquisition of the giant Nigerian oilfield in 2011.

In that case, Eni and peer Royal Dutch Shell are accused of buying the OPL 245 offshore field, better known as Malabu oilfield, for about $1.3 billion in a deal that spawned one of the industry’s largest graft scandals.

Milan prosecutors alleged that about $1.1 billion of the total was siphoned off to pay politicians, businessmen and middlemen.
Eni and Shell have denied any wrongdoing.