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 />
the schedule provided. However, the different valuati<strong>on</strong>s <strong>on</strong> the schedule were also used in the<br />
m<strong>on</strong>thly FAAC reports; as such, the errors resulted in lower remittances to FAAC.<br />
Differences not resulting in value loss to the Federati<strong>on</strong><br />
<br />
<br />
Differences due to technical charges<br />
Of the total variance noted, a total sum of $18,555,899 relates specifically to technical costs <strong>on</strong><br />
two liftings 21 with “Zafiro” as the crude type. The allowance for these technical charges was<br />
c<strong>on</strong>tained in the c<strong>on</strong>tract between <strong>NNPC</strong> and the customers.<br />
Differences due to error in schedule provided<br />
For five other liftings 22 with valuati<strong>on</strong> differences totaling $11,599,531, <strong>NNPC</strong> claimed that there<br />
were errors in the pricing opti<strong>on</strong>s stated <strong>on</strong> the schedule provided to us. We reviewed COMD’s<br />
valuati<strong>on</strong> for the affected liftings and c<strong>on</strong>firmed that different pricing opti<strong>on</strong>s were used which<br />
agreed to the values <strong>on</strong> the schedules.<br />
Based <strong>on</strong> the above explanati<strong>on</strong>s, under-valued liftings totaling $3,610,815 (shown in Table A5<br />
below) resulted in value loss to the Federati<strong>on</strong>.<br />
Descripti<strong>on</strong><br />
Undervaluati<strong>on</strong><br />
$<br />
Valuati<strong>on</strong> errors agreed by COMD 1,503,540<br />
Under reporting to FAAC 2,107,275<br />
Total unsubstantiated under-valuati<strong>on</strong> 3,610,815<br />
Table A5: Valuati<strong>on</strong> errors resulting in loss to the Federati<strong>on</strong><br />
The major beneficiaries were Fujairah Refinery - $805,545, <strong>NNPC</strong> (KRPC/WRPC) – $697,995 and<br />
<strong>NNPC</strong> (COMD) - $2,107,275. Subsequent to our identificati<strong>on</strong> of this issue, <strong>NNPC</strong> has amended the<br />
errors, and have reflected the amendments in the remittances to FAAC in October 2014.<br />
4.1.4.3. $2.34 billi<strong>on</strong> under reported revenue to Senate Committee<br />
The total revenue generated from our analysis from all revenue streams amounted to $69.34 billi<strong>on</strong><br />
as shown <strong>on</strong> Table A8 below). We discovered a difference of $2.34 billi<strong>on</strong> between the amount<br />
reported by <strong>NNPC</strong> to the Senate Committee and our analysis. This was as a result of the following;<br />
FIRS<br />
Informati<strong>on</strong> received from both COMD and FIRS revealed that the total revenue generated by FIRS<br />
amounted to $16 billi<strong>on</strong> which is $1 billi<strong>on</strong> higher than the amount reported to the Senate.<br />
NPDC<br />
Vanguardngr<br />
Informati<strong>on</strong> provided by NPDC to the Senate stated total revenue generated from liftings of $6.82<br />
billi<strong>on</strong>. This amount is $0.82 billi<strong>on</strong> higher than the amount quoted by the Rec<strong>on</strong>ciliati<strong>on</strong><br />
Committee.<br />
21<br />
Liftings 1 and 2 <strong>on</strong> Appendix 6.1.2<br />
22<br />
Liftings 5 – 9 <strong>on</strong> Appendix 6.1.2<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 48