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Investigative Forensic audit of crude oil revenues and remittances by NNPC (January 2012 – July 2013) The table below is a summary of the mother vessels and all the discharges with which we identified duplications. The details of these discharges are contained in Appendix 6.1.30 of this report. The over claim of subsidy as a result of the duplication amounted to N6,169,502,266 ($39,836,651.81). The details of the repeated verifications are shown in the Table below: Shuttle Vessel Date Of Discharge Discharge Depot Observed Vol (Ltrs) Landing Cost N Subsidy Due N Zoja 1 23-Oct-12 Capital 12,181,714 148.11 1,383,842,710 Zoja I 23-Oct-12 Capital Jetty 12,181,714 148.11 1,383,842,710 Zoja I 28-Oct-12 Capital 12,181,714 148.11 1,383,842,710 36,545,142 4,151,528,131 Ore Ofe Ex Zoja I Ex Gamma Tank 7-Apr-12 Honeywell 6,069,209 144.05 664,821,154 Mt Ore Ofe Ex Zoja I 7-Apr-12 Honeywell 6,069,209 144.05 664,821,154 ORE OFE Ex NS Spirit 19-Feb-12 Sea 6,202,958 144.05 679,472,019 Petroleum Ore Ofe 19-Feb-12 SPG 6,202,958 144.05 679,472,019 ITRI Ex Zoja 1 Ex Gamma Tank 9-Mar-12 Aquitane 6,213,264 144.05 680,600,939 Itri Ex Zoja I 9-Mar-12 Aquitane 6,213,264 144.05 680,600,939 Blue River 22-Feb-12 Zenon 6,170,560 144.04 675,861,437 BLUE RIVER Ex Jamar 23-Feb-12 Zenon Pet 6,170,560 144.04 675,861,437 49,311,982 5,401,511,098 Mt Sea Pioneer 16-Nov-12 A-Z Storage 6,157,222 148.37 701,061,297 Sea Pioneer Ex Zoja Ii 17-Nov-12 A-Z Depot 6,157,222 148.37 701,061,297 12,314,444 1,402,122,594 Subsidy Over-statement (highlighted) 55,176,641 6,169,502,266 Subsidy Over-statement (highlighted) - $ 39,836,651.81 Table D5: Details of repeated verifications of DPK between January 2012 and July 2013 4.4.4.5. PMS Subsidy Over-Statement of $36,045,669 in PPPRA’s Payment Advice to NNPC Our review of the Subsidy Payment Advice sent by PPPRA to NNPC for discharges between January 2012 and July 2013 revealed that PPPRA applied the pre-2012 Ex-Depot Price (N49.51) on some discharges in 2012 instead of the approved Ex-Depot Price of N81.51 prevailing at the time. Vanguardngr PPPRA sent a letter on 6 May 2014 to NNPC, acknowledging that PPPRA had applied N49.51 as the ex-depot price on some discharges instead of N81.51 (Please see exhibit D5). 174,449,778 litres of PMS were affected by this computation. Table D6 below shows a summary of our review of these discharges 50 . 50 See detailed breakdown in Appendix 6.1.23 - Over Statement of PMS Subsidy by PPPRA Confidential information for the sole benefit and use of the <strong>Audit</strong>or-General for the Federation. PwC 72
Investigative Forensic audit of crude oil revenues and remittances by NNPC (January 2012 – July 2013) Description Amount Official Ex-Depot Price from January 2012 N81.51 Actual Ex-Depot Price applied for some discharges in February N49.51 2012 Volume affected (Litres) 174,449,778 Adjustments for the application of N49.51 for discharges between N5,582,392,896 February 2012 and July 2013) Using $1 = N154.87, PMS Subsidy Over Statement $36,045,669 Table D6: Re-computation of the Subsidy advised by PPPRA using old ex-depot price (N49.51) in February 2012; Source: PPPRA Payment Advice; PPPRA Pricing Template, PwC Analysis 4.4.4.6. DPK Subsidy Over-Charge of $203,539,968 by NNPC Our review of a sample of the copies of the Pro Forma Invoices (PFIs) issued to the other marketers 51 of DPK across different geopolitical zones of Nigeria, revealed that the Other marketers bought DPK from NNPC/PPMC Offshore Lagos 52 at N40.90. The Other marketers are thereafter required to incur the following expenses: Description Amount N Lightering expenses 4.07 NPA Charge 0.68 Jetty Depot Throughput 0.80 Storage Charge 3.00 Minimum cost to Other marketers 8.55 Table D7 – Costs borne by other marketers after purchase of DPK from PPMC Our assumptions for the calculation of the over charge of subsidy are as follows: 1. Per our review of PPMC’s Schedule of PMS and DPK imports obtained from PPMC, 3,686,811,097 litres of DPK were transferred through Shuttle to Shuttle (STS) system to other marketers between January 2012 and July 2013. 2. Subsidy is calculated as follows: Under-recovery/Subsidy = Landing Cost – Ex-Depot Price Vanguardngr 3. Per PPPRA’s template, Landing Cost also includes Lightering expenses (N4.07), NPA charges (N0.68), Jetty Throughput Charge ((N0.80) and Storage Charges (N3.00). 4. NNPC/PPMC confirmed to us that the Other marketers incur Lightering expenses (N4.07), NPA charges (N0.68), Jetty Throughput Charge ((N0.80) and Storage Charges (N3.00) on their own after purchase of DPK from NNPC/PPMC offshore Lagos. 5. PPPRA as well as PPMC had included the costs in (3) above in their computations of the Landing Costs. 6. Using PPPRA’s template, the total of the other costs incurred by the other marketers, as reflected in (3) above is N8.55. 51 See Appendix 6.1.26. Summary of DPK Purchases from PPMC by Other marketers between January 2012 and July 2013 52 Offshore Lagos – A location within the Nigerian waterways before the Nigerian Ports in Apapa Confidential information for the sole benefit and use of the <strong>Audit</strong>or-General for the Federation. PwC 73
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