A Review of the Nigerian Energy Industry

Audit: APC faults PWC on NNPC’s unremitted $1.48bn

23 April 2015, Lagos –  The All Progressives Congress, APC, Wednesday, faulted PricewaterhouseCoopers, PWC, audit report recommending that the Nigerian National Petroleum Corporation, NNPC, remit $1.48 billion to the Federation Account.

Joseph Dawha, NNPC GMD
Joseph Dawha, NNPC GMD

The APC was of the view that the amount to be remitted by the NNPC was more than the $1.48 billion stated by the PWC in the audit report.
Head, Policy, Research and Strategy Directorate of the APC Presidential Campaign, Mr. Kayode Fayemi, told Bloomberg that the APC has reliable information about the actual amount the NNPC is to refund, adding that the party will release the report immediately it has full information on the issue.

Fayemi, who was also the former governor of Ekiti State, said the incoming administration of Muhammadu Buhari will publish the full audit of the NNPC and compel it to repay the government more than the amount that was previously recommended.

He said, “I have a figure that is more than $1.5 billion that had been talked about. We have seen credible information that what PwC says is more than that. We will release the report. We will make it available to Nigerians as soon as we have full information on this.”
Fayemi further stated that the incoming administration may reorganise the NNPC, saying that, “NNPC will not be in the form or shape it is currently in. Some measure of unbundling will happen.”

Meanwhile, Trafigura Beheer BV, the third-largest crude oil trader, yesterday confirmed that it had stopped doing business in Nigeria due to the controversy that surrounded the product-swap deal with the NNPC.

The reason it stopped doing business in Nigeria, according to Bloomberg was due to criticism from Non-Governmental Organisations, NGO, including the Swiss-based Berne Declaration over swaps deals Trafigura had conducted in Nigeria to exchange refined petroleum products for crude oil because the non-cash deal took place outside regulations for banks providing trade finance.

So-called swap deals, where no money is exchanged, have been criticized by the Berne Declaration and other non-governmental organizations because they take place outside the banking system and the oversight of regulators who supervise lending for commodity trading transactions, Bloomberg stated.

Speaking at the FT Commodities Global Summit in Lausanne, Switzerland, Jeremy Weir, Chief Executive Officer, Trafigura Beheer BV joined the heads of other commodity trading firms to make commitments towards increasing transparency as the industry draws more scrutiny from regulators and investors.

He said, “We are a large entity and our stakeholders are interested. One of the things we will push is transparency. We think the trading groups should be doing the same.”

Trafigura had a couple of days ago, agreed to adhere to some principles of the Extractive Industries Transparency Initiative and disclose some payments made to national oil companies.

Sources close to Trafigura, had in January, broken the news about the company’s scrapping of the product-swap deal with the NNPC.
With the scrapping of the deal, the source said the firm will no longer exchange gasoline and other petroleum products for crude oil with the NNPC.

The deal had been the subject of a number of controversies and had led the Federal Government to mandate PWC to audit the NNPC after the alarm raised by the former Governor of the Central Bank of Nigeria (CBN) that the NNPC had failed to remit about $20 billion to the Federation Account.
PWC had conducted the audit and recommended that the NNPC and its subsidiary, the Nigerian Petroleum Development Company, NPDC, be made to refund a minimum of $1.48 billion to the Federation Account.

– See more at: http://www.vanguardngr.com/2015/04/audit-apc-faults-pwc-on-nnpcs-unremitted-1-48bn/#sthash.zZgJUVYg.dpuf

– Vanguard

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