Audit-Report-on-NNPC

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Investigative Forensic audit of crude oil revenues and remittances by NNPC (January 2012 – July 2013) 4.3.4. Key Findings 4.3.4.1. Under-reported third party revenue of $0.43 billion MPN, in its submission to the Senate, reported revenue figures of $518,069,354 35 and $858,750,973 36 in respect of the Reserve Development and Satellite Field projects engaged in with NNPC. This amounted to a total revenue of $1,376,820,327.00. TEPNG on the other hand, reported a revenue figure of $1,053,519,002 37 in respect of the Usan project engaged in with NNPC. This revenue represents royalty and profit oil due to the Federation from these third party financing arrangements. The total revenue generated from third party financing was therefore $2,430,339,330, a figure which is $430,339,330 higher than the $2 billion reported by NNPC at the Senate Committee hearings. Source Volumes (bbls) Values ($) Mobil Producing 12,360,117 1,376,820,327 TEPNG 9,951,474 1,053,519,002 Total 22,311,591 2,430,339,330 Table c2– Total revenue generated from third party financing Source – Mobil and Total submission to the Senate 4.3.4.2. Undisclosed third party financing remittance to the Federation of $1.3 billion Out of the total revenue of $1.37 billion reported by MPN, $1.158billion 38 had been remitted to the Federation Account as at November 2013. This was confirmed by the Office of the Accountant General of the Federation 39 . The total of $858,750,973 relating to SFDP had been remitted while $300,000,000 out of the $518,069,354 relating to RDP had been remitted. The balance of $218,069,354.32 relates to the amount held back to service the financing cost. Balance after servicing the financing cost is to be distributed to the federation account as soon as the condition precedent is met. We independently confirmed the payment of the sum of $300million into JP Morgan’s CBN/NNPC Crude Oil and Gas Revenue Account on 15 November 2013 while the payment of the $858,750,973 was paid in seven (7) tranches into the same account. In respect of the USAN project handled by TEPNG, the sum of $193,478,061 and $17,943,616 totaling $211,421,677 40 , being Royalty and Profit Oil was remitted to the JP Morgan accounts. Vanguardngr 35 See Appendix 6.1.13 – RDP valuation 36 See Appendix 6.1.14 – SFDP valuation 37 See Appendix 6.1.15 – Usan valuation 38 See Appendix 6.1.9 – Mobil remittance 39 Source: Accountant General of the Federation’s submission to Senate Hearing and response to PwC’s letter 40 See Appendix 6.1.8 – TEPNG remittance Confidential information for the sole benefit and use of the <strong>Audit</strong>or-General for the Federation. PwC 62
Investigative Forensic audit of crude oil revenues and remittances by NNPC (January 2012 – July 2013) Project Revenue from NNPC’s liftings ($) Amount Remitted to the Federation Account ($) Amount held by SPV to meet contract terms RDP 518,069,354 300,000,000 218,069,354 SFDP 858,750,973 858,750,973 - USAN 1,053,519,002 211,421,677 842,097,325 Total 2,430,339,329 1,370,172,650 1,060,166,679 Table C3-Summary of Payments of Other Third Parties 4.3.5. Summary of findings Summary of findings 2.5 2 1.5 1 0.5 0 Reconciliation committee $2 bn Value $0.94 bn $1.06 bn Decrease Unremitted balance Section Adjustm ent ($bn) 4.3.4.1 0.43 4.3.4.2 (1.37 ) T otal (0.94) The reported crude oil liftings submitted by the oil companies for the Reserve Development Project (MPN’s Project) and Usan Development Project (TEPNG’s Project) agreed with the records obtained from other alternative sources. We used COMD’s records as the main source of information for comparison as COMD had the highest volumes amongst the alternative information sources. The volumes per COMD also agreed to the submissions of the IOCs at the Senate Hearing. Vanguardngr Confidential information for the sole benefit and use of the <strong>Audit</strong>or-General for the Federation. PwC 63
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