President Muhammadu Buhari should overhaul how Nigeria sells NNPC's share of crude oil output to save billions of dollars in wasted and lost revenues, a report by a non-profit international governance watchdog, atural Resource Governance Institutes (NRGI), said on Tuesday.

The body said a total overhaul is needed in order to block leakages and stop corruption in the sector.

• About half of Nigeria's 2 million barrel per day (bpd) crude output goes to NNPC, the state-owned oil company. NNPC sells half that oil to its subsidiary Pipelines and Product Marketing Co for the country's refineries.

• The poorly maintained plants are however unable to process the bulk of the oil and over the years this allocation has devolved into a "nexus of waste and revenue loss,"

• The other half of NNPC's oil share is mostly sold to "unqualified intermediaries," earning significant margins for little or no added value, rather than directly to the end-users, NRGI said.

• The mismanagement and corruption surrounding NNPC's sales lie at the heart of the problem and former central bank governor Lamido Sanusi was sacked after pointing out that $20 billion had not been remitted between January 2012 and July 2013.

• Constitutionally, NNPC is meant to remit all revenues to the country's treasury but the act establishing the state firm allows it to keep what it needs to cover costs with little oversight. The result is a legal grey area that has been open for abuse for decades.

• About 210,000 bpd of the domestic allocation, or $35 billion worth of oil, was converted to crude-for-products swap contracts starting in 2010 that are now being scrutinized by Nigerian authorities for short-changing the government.

• According to estimates by NRGI, about $16 a barrel could have been lost in 2011 alone under one offshore-processing agreement.

• One stark example found by NRGI was the non-remittance of revenues from a decade's worth of production from one field totaling $12.3 billion between 2004 and 2014.

Source: Reuters