A Review of the Nigerian Energy Industry

Forensic Audit Report: We were not indicted – NNPC

NNPC towers
NNPC towers

*As Petroleum Minister Directs NNPC to Defray Outstanding $1.48bn NPDC Signature Bonus, Taxes

05 February 2015, Sweetcrude, Lagos – The forensic audit report on the alleged missing $20bn unremitted oil revenue carried out by the reputable international firm,PriceWaterhouseCoopers has absolved the Nigerian National Petroleum Corporation (NNPC) of culpability over the allegation of non- remittance of $20bn, saying that what is due for remittance tothe Federation Account is $1.48bn Nigerian Petroleum Development Company (NPDC) being signature bonus, taxes and royalties on the assets transferred to the Corporation’s upstream subsidiary, the Nigerian Petroleum Development Company.

In a statement made available to journalists, the Corporation noted that the release of the forensic audit report has finally laid to rest the controversy surrounding allegations of “missing oil revenue” or non-remittance to the Federation Account.

The Corporation explained that it was not true that it was indicted in the Forensic Audit Report as being speculated in some quarters as the $1.48bn that the audit firm recommended the Corporation to remit to the Federation Account was not part of the alleged unremitted revenues from crude lifting.

It explained that the $1.48bn wasnever in dispute as it is made up of statutory payments such as signature bonus, taxes and royalties which are statutory payments that come with assets acquisition.

It stated that the delay in payment was due to the reconciliation processes between the Department of Petroleum Resources (DPR) and the NNPC.

Meanwhile, the Minister of Petroleum Resources, Mrs. Diezani Alison-Madueke, has directed the NNPC to defray the signature bonuses, taxes and royalties in line with the recommendation of the forensic audit report.

The Corporation stated that the forensic audit report and the Senate Committee on Finance report on the unremitted revenue all alluded to the fact that NPDC reported crude oil revenues of $5.11bn.

It further explained that the forensic audit acknowledged that the total cash remitted into the Federation Accounts in relation to the crude lifting in the period under review was$50.81bn and not $47bn and that subsidy on premium motor spirit and dual purpose kerosene stood at $8.7bn.

Expatiating further on the kerosene subsidy issue, the Corporation stated that the Forensic Audit Report also clarified that subsidy on DPK is still in force as the presidential directive of 19th October, 2009, was not gazettedin line with provisions of section 6 sub section 1 of the Petroleum Act of 1969.

The Forensic Audit Report also acknowledged that section 7 subsection 4 of NNPC Act empowers the Corporation to defray its costs and expenses including the costs of its subsidiaries from crude oil revenues, though it also recommended that the laws be reviewed to make the Corporation meet its costs and expenses entirely from the value it creates.

It would be recalled that the Federal Ministry of Finance last year hired the PriceWaterHouseCoopers, to investigate the veracity of the allegation by the former Governor of the Central Bank of Nigeria, LamidoSanusi, that $48.9bn and later $20bn was not remitted to the Federation Account by the NNPC.

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