Audit-Report-on-NNPC
Audit-Report-on-NNPC
Audit-Report-on-NNPC
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Investigative Forensic audit of crude oil revenues and remittances by <strong>NNPC</strong> (January 2012 – July 2013)<br />
Other Third Party Financing arrangements (OTPF)<br />
Due to liquidity challenges, <strong>NNPC</strong> was funding Explorati<strong>on</strong> and Producti<strong>on</strong> (Capex and Opex) using<br />
external lenders. In this instance, the <strong>NNPC</strong> and its Joint Venture (JV) partners form a Special<br />
Purpose Vehicle (SPV) which sources funds externally. The SPV repays the lender using crude oil<br />
from producti<strong>on</strong>.<br />
Nigeria Petroleum Development Company (NPDC)<br />
NPDC is a fully owned <strong>NNPC</strong> subsidiary. The company has carried out explorati<strong>on</strong> and producti<strong>on</strong><br />
operati<strong>on</strong>s since 1988 and has also been assigned assets by <strong>NNPC</strong> following the divestment by some<br />
JV partners between 2010 and 2011. NPDC pays the Federati<strong>on</strong>, royalties and taxes <strong>on</strong> liftings from<br />
its oil and gas assets.<br />
4.1.1.7. Senate submissi<strong>on</strong>s<br />
The Senate Committee set up to investigate the alleged unremitted crude oil revenue to the<br />
Federati<strong>on</strong> Accounts requested submissi<strong>on</strong>s from relevant parties including CBN and <strong>NNPC</strong>. CBN<br />
stated in its initial submissi<strong>on</strong> that based <strong>on</strong> the informati<strong>on</strong> received from Pre-shipment Inspecti<strong>on</strong><br />
Agencies (PIA), the revenue accruing to the Federal Government was a sum of $65 15 billi<strong>on</strong>.<br />
The Ministry of Finance set up a Rec<strong>on</strong>ciliati<strong>on</strong> Committee to align the differing figures that were<br />
being reported and a final rec<strong>on</strong>ciled revenue figure of $67 billi<strong>on</strong> was agreed.<br />
S/N SOURCE AMOUNT ($bn)<br />
1 Equity 14<br />
2 Domestic Crude 15<br />
3 FIRS 2<br />
4 DPR 28<br />
5 NPDC 6<br />
6 Third Party Financing 2<br />
TOTAL 67<br />
Table A1 – Summary of crude oil revenue generated for the period of January 2012 to July 2013 as reported by <strong>NNPC</strong><br />
4.1.2. Procedures Performed<br />
1. Reviewed Senate submissi<strong>on</strong>s from the various stakeholders to determine the agreed revenue<br />
from crude oil liftings.<br />
2. C<strong>on</strong>ducted interviews with relevant process owners to c<strong>on</strong>firm our understanding of <strong>NNPC</strong>’s<br />
revenue management and reporting processes.<br />
Vanguardngr<br />
3. Requested informati<strong>on</strong> <strong>on</strong> the volumes and prices of crude oil lifted during the period under<br />
review from COMD, DPR and PIAs in order to establish lifting volumes and values.<br />
4. Compared the lifting volumes obtained from COMD and DPR during the period under review and<br />
highlighted any variances to ensure accuracy and completeness of data.<br />
5. Rec<strong>on</strong>ciled prices of crude oil obtained from COMD with Platts quotati<strong>on</strong>s.<br />
6. Reviewed discrepancies and variances by discussing with staff of COMD and PPMC to ensure<br />
integrity of the data used for c<strong>on</strong>clusi<strong>on</strong>s.<br />
7. Documented findings and c<strong>on</strong>clusi<strong>on</strong>s.<br />
15<br />
CBN submissi<strong>on</strong> to the Senate<br />
C<strong>on</strong>fidential informati<strong>on</strong> for the sole benefit and use of the <str<strong>on</strong>g>Audit</str<strong>on</strong>g>or-General for the Federati<strong>on</strong>.<br />
PwC 45