Audit-Report-on-NNPC

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Investigative Forensic audit of crude oil revenues and remittances by NNPC (January 2012 – July 2013) 2012 Pumped m 3 Received m 3 Variance m 3 Variance (bbls) NNPC’s Figures 5,313,158 4,847,425 (465,733) (2,929,364) Independent Surveyor’s <strong>Report</strong> 5,317,737 4,808,362 (509,375) (3,258,031) Difference (4,579) 39,063 43,642 328,667 Table G3 – Comparison of Variances in Crude Oil Losses in 2012 2013 Pumped Received Variance Variance m 3 m 3 m 3 (bbls) Independent Surveyor’s <strong>Report</strong> 3,265,874 2,991,025 (274,849) (1,728,732) Schedule from NNPC 3,187,708 2,920,049 (267,659) (1,657,025) Difference 78,166 70,976 (7,190) (71,707) Table G4 – Comparison of variances in crude oil losses in 2013 Valuation of Crude Oil loss NNPC applied a conversion rate of $100/barrel to value the crude oil difference between the quantity pumped and quantity received at the refineries. We adopted the monthly average Platts price, given that the revenue generated from crude oil lifted during the review period was accounted for using Platts price and the pricing options depending on the contract. It will be unrealistic to adopt a parallel conversion rate of $100 per barrel to value the quantities of crude lost during oil movements/transfers. Applying the monthly average Platts price to value the crude oil losses amounted to $73,851,144.93 higher than PPMC’s valuation, as shown in table below; Conversion Rate Amount $ Using $100/ barrel (292,936,421.68) Using Monthly average of (358,804,942.37) Platts price Difference: 2012 65,868,520.69 Using $100/ barrel (172,873,241.00) Using Monthly average of (180,855,865.24) Platts price Difference: 2013 7,982,624.24 2012 + 2013 73,851,144.93 Vanguardngr Table G5 – Valuation of Crude Oil Losses Confidential information for the sole benefit and use of the <strong>Audit</strong>or-General for the Federation. PwC 100
Investigative Forensic audit of crude oil revenues and remittances by NNPC (January 2012 – July 2013) 4.7.4.2. Refined product losses 4.7.4.2.1. Non availability of third party report to confirm the correctness of the quantities stated as Inter-depot transfers There was no third party report to confirm the correctness of the quantities stated as Inter-depot transfers through the pipelines. We could not use DPR data because the records only discloses the total product received which included data from different channels (pipeline, tanks and /or vessels) without disaggregating the data per channel. The data also shows the total litres of products processed and produced by the refinery on a monthly basis but did not provide quantities of refined product piped by the refineries to the depots. We therefore relied on the monthly oil movement and quality control reports from NNPC’s operation areas showing the status of the pipeline, downtime, depot balances and quantities delivered through pipelines. 4.7.4.2.2. 503,372 litres of refined petroleum products (PMS/DPK/AGO) lost during the review period Using the monthly Oil movement and quality control report submitted by the various PPMC operation areas, it was found that a total of 503,372 litres of refined product was lost during the storage and distribution of refined petroleum products ( PMS, DPK and AGO) within the review period. The loss was 152 litres higher than NNPC’s reported loss of 503,220 litres within the review period. Pipelines PMS DPK AGO Total (Litres) (Litres) (Litres) (Litres) 1 Atlas Cove Depot to Mosimi 245,440 - 5,609 251,049 Idimu-Satellite Pipeline 2 Mosimi to Ibadan Pipeline 103,107 - - 103,107 3 Mosimi to Satellite Pipeline - - - - 4 Ibadan to Ilorin Pipeline 25,948 - - 25,948 5 Mosimi to Ore Pipeline 36,923 - - 36,923 6 Kaduna to Kano Pipeline (1,507) - 6,820 5,313 7 Kaduna to Suleja Pipeline 15,243 - 8,059 23,302 Vanguardngr 8 Kaduna to Jos Pipeline 3,726 - 10,168 13,894 9 Kaduna to Gusau Pipeline 1,768 - - 1,768 10 Suleja to Minna Pipeline 4,883 - 2,993 7,876 11 Jos to Gombe Pipeline 7,021 - 9,132 16,153 12 Port Harcourt to Aba Pipeline 3,400 1417 3,991 8,808 13 Warri to Benin Pipeline 7,466 893 872 9,231 TOTAL 453,418 2,310 47,644 503,372 Confidential information for the sole benefit and use of the <strong>Audit</strong>or-General for the Federation. PwC 101
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