Audit-Report-on-NNPC

Investigative Forensic audit of crude oil revenues and remittances by NNPC (January 2012 – July 2013)
Summary of crude oil revenue and remittance by NNPC (January 2012 - July 2013)
Description $'billions Comments
Revenue generated per reconciliation committee 67.00
Additional revenue generated upon our investigation 2.34
Actual revenue generated 69.34
Costs directly attributable to domestic crude (1.46)
Total other third party financing arrangement (1.06)
Equity crude oil processing cost (0.13)
Unremitted revenues – NPDC (5.11) I
PMS and DPK subsidy (8.70) II
Amount due 52.88
Other costs not directly related to domestic crude oil
operations- ($2.81billion)
Salaries and benefits (1.52)
Monthly operations (0.48)
Other third party payments (including training course fees, estacode, and (0.81)
consultancy fees, and other vendor payments)
Expected remittance 50.07
Actual remittance 50.81
Potential excess remittance to the federation for the review (0.74)
period
Table (ii)
The Corporation represented that the potential excess remittance of $0.74 billion was funded
from proceeds of PMS sales for which the suppliers of the PMS are yet to be paid in cash or
crude oil. As at the time of concluding this report, details of the affected suppliers that funded
this potential excess remittance are yet to be provided by the Corporation.
The analysis above and resulting potential excess remittance suggest the existence of liabilities
to third parties incurred by the Corporation. We recommend the Corporation be required to
disclose details of all existing liabilities and impact on proceeds of future crude oil sales.
The Corporation is expected to operate in accordance with the NNPC Act LFN No 33 of 1977
which states in Chapter 320 Part I subsection 7(4) as follows:
Vanguardngr
“The Corporation shall maintain a fund which shall consist of-
(a) such moneys as may from time to time be provided by the Federal Government for the purposes
of this Act by way of grants or loans or otherwise howsoever; and
(b) such moneys as may be received by the Corporation in the course of its operations or in relation
to the exercise by the Corporation of any of its functions under this Act, and from such fund there
shall be defrayed all expenses incurred by the Corporation.”
Accordingly, all the Corporations costs, and those of its loss making subsidiaries have been
defrayed in the analysis provided by the Corporation for the review period. However, the
profit making subsidiaries and dividends received have been excluded from the analysis
provided. This suggests that there are other sources of net revenues available to the
Corporation not currently disclosed. A proper estimate of the actual potential excess
Confidential information for the sole benefit and use of the <strong>Audit</strong>or-General for the Federation.
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