Audit-Report-on-NNPC

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Investigative Forensic audit of crude oil revenues and remittances by NNPC (January 2012 – July 2013) The sections below explain the differences in data submitted by the Reconciliation Committee and PwC data used in our analysis. We were not provided with the source of the data used by the Reconciliation Committee in arriving at its conclusions 2.4. Revenue Generated $2.34 billion under-reported revenue generated The total revenue generated from our analysis of all crude oil revenue streams amounted to $69.34 billion. This was $2.34billion higher than the amount reported by the Reconciliation Committee. The difference was as a result of the following; A. FIRS – Data received from both COMD and FIRS put revenue generated from FIRS tax oil lifting at $16 billion which is $1 billion higher than the amount quoted by the Reconciliation Committee. B. NPDC – Information submitted by NPDC to the Senate Committee stated total revenue generated from lifting at $6.82 billion. This is $0.82 billion higher than the Senate Reconciliation Committee’s figure. C. Third Party Financing – Data received from COMD and confirmed by Mobil Producing Nigeria Limited (MPNL) and Total E&P Nigeria Limited (TEPNL) during their submissions at the senate hearing, revealed total revenue figures of $2.43 billion. This is $0.43 billion higher than the amount reported by the Reconciliation Committee. D. Our analysis also revealed increased revenue of $0.29 billion and $0.22 billion from Equity and Domestic crude oil lifting respectively, and a reduction of $0.42 billion from DPR royalty revenue, when compared to Reconciliation Committee’s figures. 2.5. Revenue Remitted Under-reported revenue remittance of $3.81bn The total cash remitted into the Federation accounts from crude oil liftings for the period under review amounted to $50.81 billion. We were able to trace $49.33bn of this amount to the FGN bank accounts listed in Appendix 6.1.33. The balance of $1.48billion was also traced to the FAAC report for subsequent months. Please refer to Section 4.2.7 for more details. Vanguardngr $3.81billion is the difference between $50.81billion and the $47billion amount reported by the Senate Reconciliation Committee. This difference was as a result of the following: A. FIRS remittance – We verified additional $1 billion revenue generated by FIRS which was not reported by the Reconciliation Committee. We also traced the payment of this amount to the CBN/FIRS JP Morgan account. Confidential information for the sole benefit and use of the <strong>Audit</strong>or-General for the Federation. PwC 26
Investigative Forensic audit of crude oil revenues and remittances by NNPC (January 2012 – July 2013) B. Other third party financing remittance – $1.37billion was received from the third party financing arrangements. The arrangement with TEPNL resulted in the payment of $211million to the Federation from the USAN Field TMP project which represents Royalty and Profit oil, while the sum of $1.16billion was received from MPNL from the Satellite Field and Reserve Development projects. C. NPDC remittance – Cash payments of $1.7billion representing Petroleum Profit Tax and Royalties had been remitted. D. Equity crude and DPR royalty oil remittance – The remittance received from Equity crude sales, and in favour of DPR royalty oil, was $0.16 billion higher and $0.42billion lower than the Senate Reconciliation Committee figures respectively. 2.6. Other Third Party Financing Arrangements Under-reported Third Party Financing Revenue of $0.43 billion Mobil Producing Nigeria Limited, in its submission to the Senate, reported revenue figures of $518million 5 and $859million 6 in respect of the Reserve Development Project (RDP) and Satellite Field Development Project (SFD) respectively. Total E&P reported a revenue figure of $1.053 billion 7 in respect of the USAN project. These amounts represent royalty and profit oil due to the Federation from these third party financing arrangements. The total revenue generated from third party financing arrangement was $2.43billion and not $2 billion reported by the Reconciliation Committee. Undisclosed remittance to the Federation account Out of the total revenue reported by MPNL, $1.158billion 8 had been remitted to the Federation Account as at November 2013. This was confirmed by the Office of the Accountant General of the Federation at the presentation to the Senate Committee. We also traced these payments to the CBN/NNPC JP Morgan account. The total of $858,750,972 relating to SFD had been remitted while $300,000,000 out of the $518,069,354 relating to RDP had been remitted. The balance of $218,069,354 was withheld to service the project finance cost and subsequent remittance of the net amount, in accordance with the contract terms. In respect of the USAN project handled by Total E&P Nigeria Limited, the sum of $193,478,061.15 and $17,943,616 totaling $211,421,677 9 , being Royalty and Profit Oil was remitted to the Federation account Vanguardngr 5 See Appendix 6.1.13 – RDP valuation 6 See Appendix 6.1.14 – SFDP valuation 7 See Appendix 6.1.15 – Usan valuation 8 See Appendix 6.1.9 – Mobil remittance 9 See Appendix 6.1.8 – TEPNG remittance Confidential information for the sole benefit and use of the <strong>Audit</strong>or-General for the Federation. PwC 27
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