Audit-Report-on-NNPC

Investigative Forensic audit of crude oil revenues and remittances by NNPC (January 2012 – July 2013)
3.3.2. Equity crude oil and revenue flow
1.1 Oil field
1.2.1 Equity
(export)
crude
2.1 CBN/NNPC
JPMorgan USD
Crude Oil
Account
LEGEND
Oil flow
Funds flow
1.2
Terminals
2.1.1
Statutory
accounts/
deductions
Federation Account
Figure 1.2: Equity crude oil and revenue flow
Source: Discussion with COMD
1.1 Oil production
Nigeria produces over 2.5million barrels of crude oil per
day
NNPC in joint partnerships with major licensed Oil
Companies operate 0il wells for the exploration of Crude Oil
Unprocessed crude oil is lifted from the Oil wells and
distributed to terminals
There are usually cases of leakages in the pipeline
distribution to the terminals due to pipeline vandalism,
spillages etc.
1.2 Oil liftings at terminals
At the terminals, crude oil lifted is allocated to NNPC and
other oil producers.
The Total crude oil lifted can either be exported (Equity) or
kept locally for Nigeria’s use (Domestic)
1.2.1 Equity crude
The Federation’s equity interest in crude oil production is lifted
as the FGN’s share under Joint Venture (JV) and Production
Sharing Contract (PSC) arrangements with other Oil
companies.
2.1 Equity crude proceeds
Proceeds from the sale of NNPC liftings of the Federation’s
share of total crude liftings are paid into the CBN/NNPC USD
account with JP Morgan. Upon NNPC’s periodic instruction to
the CBN, proceeds in the JP Morgan account are transferred to
the Federation account.
2.1.1 Deductions
Withdrawals are made from the JP Morgan accounts
periodically, based on transfer instructions issued by NNPC to
CBN
Vanguardngr
Confidential information for the sole benefit and use of the <strong>Audit</strong>or-General for the Federation.
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