NAPIMS says Report of Spent N89.9bn on Public Relations is False
Recently, there were reports in some media that the management of the National Petroleum Investment Management Services (NAPIMS) spent the sum of N89.9bn on ‘Public Relations’ in 2021.
The Report had claimed that the amount represented an increase of 335 per cent against the N20.69bn spent by the Company in 2020.
But in coming up with the N89.9bn claimed to have been spent on “Public Relations,” the Reports published in the media platforms did not take the modus operandi of NAPIMS into consideration.
As a background, NAPIMS manages Nigeria government’s investments in the upstream sector, to maximize return on its investments through effective supervision of the Joint Venture, Production Sharing Contract and Sharing Contract using best industry practices.
It engages in direct exploration of the frontier basins in order to open it for investors. The Company also represent the Nigeria government’s equity holdings through the Nigerian National Petroleum Company Ltd in the Joint Venture operations with Shell Petroleum Development Company Limited, Mobil Producing Nigeria Unlimited, Chevron Nigeria Limited, Total Exploration and Production Nigeria Limited, Nigeria AGIP Oil Company Limited, and Pan Ocean Oil Corporation.
In addition, the Company also supervises the mechanism of funding the Joint Venture Operations through the Cash-Call Process.
Facts check shows that NAPIMS alone could not have wholly incurred such expenditure without its Joint Venture Partners.
For instance, analysis of the Audited Financial Statements showed that NAPIMS represents the equity share in the 13 Joint Venture arrangements in the upstream sector of Nigeria’s Oil and Gas industry.
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The implication of this is that all the accrued revenues from its equity crude oil and gas lifted, and other incomes and expenditures incurred by all the Joint Venture Operators are consolidated to prepare the NNPCL/NAPIMS Audited Financial Statements in respect of the NNPCL Upstream Petroleum activities.
What this means is that the amount of N89.92bn reported by some media outlets as ‘public relations’ represents NNPC/NAPIMS equity share of expenditure on Community Development and Public Relations by all Joint Venture Operators in the Upstream Oil and Gas sector.
For the sake of clarity, the bulk of this expense relates to NNPCL/SPDC JV made up of NNPCL (55%), Shell (30%), TOTAL Energies (10%) and the Nigeria Agip Oil Company NAOC (5%).
Further analysis of the Audited Financial Statement showed that a significant component of the NNPCL/SPDC JV expenditure is the N83,835,000,000 ($207m) spent on spillage clean-up activities, rehabilitation of polluted areas, and pollution compensation in the Niger Delta Region.
