Audit-Report-on-NNPC

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Investigative Forensic audit of crude oil revenues and remittances by NNPC (January 2012 – July 2013) the schedule provided. However, the different valuations on the schedule were also used in the monthly FAAC reports; as such, the errors resulted in lower remittances to FAAC. Differences not resulting in value loss to the Federation Differences due to technical charges Of the total variance noted, a total sum of $18,555,899 relates specifically to technical costs on two liftings 21 with “Zafiro” as the crude type. The allowance for these technical charges was contained in the contract between NNPC and the customers. Differences due to error in schedule provided For five other liftings 22 with valuation differences totaling $11,599,531, NNPC claimed that there were errors in the pricing options stated on the schedule provided to us. We reviewed COMD’s valuation for the affected liftings and confirmed that different pricing options were used which agreed to the values on the schedules. Based on the above explanations, under-valued liftings totaling $3,610,815 (shown in Table A5 below) resulted in value loss to the Federation. Description Undervaluation $ Valuation errors agreed by COMD 1,503,540 Under reporting to FAAC 2,107,275 Total unsubstantiated under-valuation 3,610,815 Table A5: Valuation errors resulting in loss to the Federation The major beneficiaries were Fujairah Refinery - $805,545, NNPC (KRPC/WRPC) – $697,995 and NNPC (COMD) - $2,107,275. Subsequent to our identification of this issue, NNPC has amended the errors, and have reflected the amendments in the remittances to FAAC in October 2014. 4.1.4.3. $2.34 billion under reported revenue to Senate Committee The total revenue generated from our analysis from all revenue streams amounted to $69.34 billion as shown on Table A8 below). We discovered a difference of $2.34 billion between the amount reported by NNPC to the Senate Committee and our analysis. This was as a result of the following; FIRS Information received from both COMD and FIRS revealed that the total revenue generated by FIRS amounted to $16 billion which is $1 billion higher than the amount reported to the Senate. NPDC Vanguardngr Information provided by NPDC to the Senate stated total revenue generated from liftings of $6.82 billion. This amount is $0.82 billion higher than the amount quoted by the Reconciliation Committee. 21 Liftings 1 and 2 on Appendix 6.1.2 22 Liftings 5 – 9 on Appendix 6.1.2 Confidential information for the sole benefit and use of the <strong>Audit</strong>or-General for the Federation. PwC 48
Investigative Forensic audit of crude oil revenues and remittances by NNPC (January 2012 – July 2013) Third Party Financing Information received by COMD and confirmed by the third parties Mobil and Total revealed total revenue figures of $2.43 billion. This is $0.43 billion higher than the amount reported to the Senate by NNPC. Equity, Domestic and DPR Our analysis also revealed increased revenue of $0.29 billion and $0.22 billion respectively from Equity and Domestic streams and a reduction of $0.4 billion from DPR revenue when compared to the amounted reported to the Senate. NNPC VARIANCE VERIFIED NATURE SUBMISSION $ $ $ Equity crude 14.00 14.29 0.29 Domestic sales 28.00 28.22 0.22 FIRS 15.00 16.00 1.00 DPR 2.00 1.58 (0.42) NPDC 6.00 6.82 0.82 Third party financing 2.00 2.43 0.43 TOTAL 67.00 69.34 2.34 Table A6 – Difference between submission to Senate Committee and PwC conclusion Conclusion Total revenue valuation Our conclusion on total revenue generated for the Federation in the period from January 2012 to July 2013 is detailed below; S/N Values NATURE Volumes (bls) ($) 1 Equity 128,741,037 14,293,713,820 2 Domestic Crude 254,738,219 28,215,731,691 3 FIRS 144,811,144 16,004,971,181 4 DPR 14,411,415 1,578,108,269 5 NPDC 61,027,701 6,815,188,626 Vanguardngr 6 Third Party Financing 22,311,591 2,430,339,330 TOTAL 626,041,107 69,338,052,916 Table A8– Total revenue generated in the period under review, PwC conclusion Confidential information for the sole benefit and use of the <strong>Audit</strong>or-General for the Federation. PwC 49
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