THE Federal Government, yesterday, distanced itself from claims of insolvency over the status of the Nigeria National Petroleum Corporation, NNPC, credited to the Minister of State for Finance, Mr. Remi Babalola, saying that the minister might have misfiredin the present circumstance.
The government’s decision on the matter, as discussed and adopted at the Federal Executive Council, FEC, came barely 48 hours after Babalola declared that the troubled NNPC was insolvent.

But introducing the NNPC controversy as one of the major highlights of the post FEC briefing, Minister of Information and Communications, Professor Dora Akunyili, refuted the claims, insisting that the minister acted on his own.

Babalola had declared, Tuesday, during the Federation Accounts Allocation Committee, FAAC, meeting in Abuja that NNPC owed FAAC a shortfall of N450 billion in unremitted crude oil receipts and might not be able to repay the debt unless it is reimbursed.

He had noted: “NNPC is insolvent as current liabilities exceed current assets. NNPC is incapable of repaying the N450 billion owed to the Federation Account unless it is reimbursed the N1.156 trillion (in subsidies) it has requested from the Federal Ministry of Finance.”

In a prepared statement by the Federal Government which was read by Akunyili, government frowned at the minister’s misguided statement which it said was capable of sending a bad signal to the oil and gas business community.

Akunyili who was joined by Minister of Finance, Olusegun Aganga, and Babalola, said: “NNPC, from the auditor’s account is a going concern and does not have solvency issue as a corporation.

Therefore categorically, NNPC is not insolvent. Given the nature of NNPC, there are regular transactions between it and the Federal Government and as a result there are always outstanding balances between the cooperation and the Federal Government.”

Aganga, in attempt to justify the solvency of the corporation, said the transactions referred to by Babalola was just two out of the numerous outstanding balances between the Federal Government and the NNPC, noting that they did not give a true picture of the financial state of the corporation.

He said: “We have so many different transactions between the NNPC and the federal government, in some form of the balances it maybe a daily balance and in another it may be a trade balance. You need to make all of these things up.

“What you saw yesterday was just balances arising from two types of transactions that we have made and that was the point they were trying to make.

So it is incomplete and it doesn’t give you the complete picture. Once reconciliation is done payment goes back and forth, between the two entities.”

Aganga added: “The payment to NNPC we made is done regularly but as you know, NNPC is involved in all the joint ventures we have in the country. It is involved with all international oil companies, IOCs, we still have all the wells and all other parastatals related to the NNPC.”

Asked how long it would take the NNPC to offset the balances, the minister said: “If you are worried about NNPC that is a different matter. You are aware that there is a forensic audit that the President asked us to undertake and that is happening now. If you ask when it will be out I would say that it is roughly going to be about eight weeks.”

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