Others • Created April 28, 2015 09:46

Report suggesting NNPC to refund FG $1.48bn raises dust

Report of an audit into controversial funds of the Nigerian National Petroleum Corporation sparks concern as to the extent of investigations into the company’s deals. It comes after audit firm PriceWaterhouseCoopers statement that its investigation on NNPC fell short of thorough probe of the NNPC according to auditing standards. “The procedures we performed did not […]

Report suggesting NNPC to refund FG $1.48bn raises dust
Report suggesting NNPC to refund FG $1.48bn raises dust

Report of an audit into controversial funds of the Nigerian National Petroleum Corporation sparks concern as to the extent of investigations into the company’s deals.

It comes after audit firm PriceWaterhouseCoopers statement that its investigation on NNPC fell short of thorough probe of the NNPC according to auditing standards.

“The procedures we performed did not constitute an examination or a review in accordance with generally accepted auditing standards or attestation standards,” the audit firm said in its introduction to the report.

“Accordingly, we provide no opinion, attestation or other form of assurance with respect to our work or the information upon which our work was based.”

PWC was engaged to investigate allegations that NNPC did not remit funds into the Federation Account for 19 months—between January 2012 and July 2013.

PWC was engaged in June 2014 to analyse shortfalls in NNPC remittance, analyse submissions by key stakeholders in relations to the shortfalls and produce an “independent” forensic report.

PWC submitted its 119-page report to the office of the auditor-general of the federation on February 2 this year.

But the report was never made public until yesterday, when the Presidency came under pressure over its handling of the probe and NNPC spending, the famous $20 billion funds.

Allegations

The report sparked interest after PWC said its analyses were based only information available to it.

Chief among them, PWC auditors did not obtain any information from Nigerian Petroleum Development Corporation, but used the submissions of the NPDC’s former managing director Briggs Victor to a senate committee hearing on the spending.

PWC recommends NNPC and NPDC should refund to the Federation Account a minimum of $1.48billion.

PWC’s audit concluded:

Total gross revenues generated from FGN crude oil liftings was $69.34bn and NOT $67 billion as earlier stated by the Reconciliation Committee for the period from January 2012 to July 2013.

  •  Total cash remitted into the Federation accounts in relation to crude oil liftings was $50.81bn and NOT $47bn as earlier stated by the Reconciliation Committee for the period from January 2012 to July 2013.

  •  NNPC has provided information on the difference leading to a potential excess remittance of $0.74 billion (without considering expected remittances from NPDC). Other indirect costs of $2.81billion which were not part of the submission to the Senate Committee hearing have been defrayed to arrive at this position.

  • We therefore recommend that the NNPCmodel of operationmust be urgently reviewed and restructured, as the current model which has been in operation since the creation of the Corporation cannot be sustained.

  •  The report reflects the fact that $3.38 billion was spent on DPK subsidy for the review period. We also confirmed using third party vessel tracking platforms that all vessels carrying NNPC cargoes arrived in Nigeria within the periods disclosed by PPPRA.

  •  A major consideration centers on the ownership of oil and gas assets controlled by NPDC.

 A determination is required as to whether all or a portion of ‘other costs not directly attributable to crude oil operations can be defrayed by NNPC.

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