A Review of the Nigerian Energy Industry

Forensic audit report: No money is missing – NNPC insists

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*Says PwC’s demand for restructuring already in PIB

Oscarline Onwuemenyi

12 February 2015, Sweetcrude, Abuja – The Nigerian National Petroleum Corporation (NNPC) has insisted that the report of the forensic audit carried out on its accounts by the international auditing firm, PricewaterhouseCoopers (PwC) did not indict it in anyway but rather absolved it of culpability on all counts.

The Group Managing Director (GMD) of the NNPC, Dr. Joseph Dawha, who stated this at a press conference held in Abuja to clarify the highlights of the PwC forensic audit report, observed that the entire revenues accruable to the Federation during the period have been fully accounted for in the report.

He noted that the issue of the outstanding $1.48bn which made some sections of the media to claim that the Corporation was indicted, was actually the balance of the book value of the divested assets that were transferred to NNPC upstream subsidiary, the Nigerian Petroleum Development Company (NPDC), excluding taxes and royalties.

“This does not constitute indictment; rather this value is still being reconciled with the Department of Petroleum Resources (DPR). It is pertinent to note that the $1.48bn was not part of the alleged unremitted revenues from crude oil sales” Dr. Dawha insisted.

He added, “Let me emphasise that no money is missing. However, the delay in payment of the true value of the divested assets is due to the unfinished reconciliation process among NNPC, DPR and other agencies of government.”

Explaining further, the GMD stated that what the DPR sent to NNPC as the estimated value of the assets was $1.847bn out of which the Corporation paid over $300m as a token to indicate its commitment to acquiring the assets pending resolution and reconciliation by NNPC and DPR.

Speaking on the issue of remittances of proceeds from crude oil sales into the Federation Account in the period from 1 January, 2012 to 31 July, 2013, the NNPC Chief Executive Officer explained that the PwC Forensic Audit report was clear that NNPC remitted $50.81bn out of a total of $69.34bn, adding that the report acknowledged that the balance was spent on petrol and kerosene subsidy as well as the Corporation’s operation costs.

He explained that both the Senate Finance Committee probe report and the PwC forensic audit report corroborated the Corporation’s position that subsidy on kerosene was still in force as the Presidential directive of 19th October, 2009, was not gazetted in line with the provisions of Section 6, Subsection 1 of the Petroleum Act of 1969.

The GMD who expressed joy at the successful completion of the forensic audit exercise to lay to rest the 15-month long controversy over the allegation of missing $49.8bn stated that the report “has clearly vindicated our long held position that the alleged unmerited crude oil revenue was a farce from day one.”

Dr. Dawha also explained that though the Forensic Audit Report recommended a review of the laws to stop NNPC from deducting its costs and expenses from crude oil sales proceeds, it also acknowledged that they were not illegal.

He however stated that the Management of NNPC was fully in support of the ongoing process of reviewing the laws governing its operations and has commenced internal transformation ahead of the passage of the Petroleum Industry Bill (PIB) which is currently undergoing legislative processes at the National Assembly.

He called on the media to eschew sensationalism and help disseminate the facts regarding the alleged missing money as contained in the reports of the various probes instituted to get to the bottom of the matter.

The GMD who was flanked at the conference by members of NNPC Top Management urged Nigerians to shun malicious reports linking the Corporation with missing or unmerited oil revenue, adding that the various probe reports, including the latest PwC Forensic Audit Report, have clearly stated that no oil money is missing.

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