Audit-Report-on-NNPC

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Investigative Forensic audit of crude oil revenues and remittances by NNPC (January 2012 – July 2013) Victor Briggs, who put the total value of NPDC liftings from its traditional and divested assets at a higher figure of $6.82billion. Summary of NPDC revenues from all assets: January 2012 to July 2013 Description Quantity lifted (bbls) Values ($) NPDC Traditional assets 25,666,592 2,857,103,901 Divested assets assigned to NPDC 27,293,424 3,071,272,852 Total 52,960,016 5,928,376,753 Service Contract – Agip Energy 1,795,880 188,385,411 SAA – Atlantic 3,464,846 387,463,865 SAA – Septa 2,806,959 310,962,597 Sub-total 6,271,805 698,426,462 Total Service Contract/Strategic Alliance Agreements 8,067,685 886,811,873 Total NPDC assets 61,027,701 6,815,188,626 Table E1 – Summary of NPDC revenues from all assets: January 2012 to July 2013 Source: NPDC submission to the Senate We however performed a re-computation of the values of liftings using information provided by the Crude Oil Marketing Division of NNPC and DPR, as summarized in Table E2 below. The DPR and COMD columns summarize our data analysis from liftings information received from DPR and COMD, while the NPDC column contains figures quoted by NPDC at the Senate. We obtained crude oil volumes from DPR and COMD, confirmed approved pricing options applicable to sales from invoices obtained from COMD as well as the monthly approved Official Sales Price information. We then independently obtained dated Brent information from Platts and determined expected unit prices, which we multiplied by the volumes. Recomputation of revenue from NPDC crude liftings Description NPDC DPR COMD Vanguardngr NPDC Crude liftings (bbls) 52,960,016 62,028,352 50,536,316 Liftings for SAA/SC partners (bbls) 8,067,685 - - Total liftings (bbls) 61,027,701 62,028,352 50,536,316 NPDC Crude proceeds ($) 5,928,376,753 6,886,837,854 5,652,259,919 Liftings for SAA/SC partners ($) 886,811,873 - - Total liftings ($) 6,815,188,626 6,886,837,854 5,652,259,919 Table E2 – Summary of NPDC revenues from all assets: January 2012 to July 2013 Confidential information for the sole benefit and use of the <strong>Audit</strong>or-General for the Federation. PwC 84
Investigative Forensic audit of crude oil revenues and remittances by NNPC (January 2012 – July 2013) Per the submission of NPDC to the Senate, total crude lifted from all assets was 61million bbls which amounted to $6.82billion. Of this amount, 8million bbls (valued at $886million) was lifted in favour of SAA and SC partners as their entitlements under the various contracts. While we were unable to verify the $6.82 billion directly at NPDC, we performed a recomputation of the values of liftings using information provided by COMD and arrived at a value of $5.65 billion 68 . These liftings were agreed to DPR lifting information. DPR however captured an extra 11.5 million bls lifted on behalf of NPDC and its funding partners. Although the DPR information did not contain necessary pricing information, our value estimation 69 of the 11.5 million bls was $1.24 billion. Please see table E2 above for summary. Please note that the DPR valuation is an estimate for comparison purposes only. From the summary in table E2, we assume that the difference between the lifting value declared by NPDC at the Senate hearing and our estimate using DPR records, was due to the estimated pricing options we adopted in assigning values to lifting recorded by DPR for NPDC. We therefore concluded that NPDC’s position of $6.82 billion was reasonable enough to be used in our analysis. 4.5.4.3. Cash payments by NPDC to FIRS not captured by Reconciliation Committee During our discussions with FIRS, we were informed that NPDC had not been assessed for taxation purposes for the period January 2012 – July 2013. NPDC paid $863million in cash to FIRS towards PPT for its crude oil activities during the review period, based on PPT estimates. These payments were confirmed by FIRS to have been received. We traced the cash payments by NPDC to CBN/FIRS bank statements with JP Morgan (as summarized in Table E3 below). Summary of cash payments made by NPDC to FIRS Date/period of payments Amount ($) 18-Apr-13 48,000,000 3-Jun-13 48,000,000 21-Jun-13 48,000,000 31-Jul-13 48,000,000 Total payments made between January 2012 and July 192,000,000 2013 Payments made after January 2014 671,000,000 Total payments relating to revenue from NPDC 863,000,000 liftings between January 2012 and July 2013 Table E3 – Summary of NPDC cash payments to FIRS for liftings during period Vanguardngr It is important to note that even though these amounts have been paid by NPDC and confirmed by FIRS, the company needs to be appropriately assessed by FIRS to determine the exact amount due as PPT from NPDC liftings during January 2012 and July 2013. NPDC communicated an estimated PPT liability of $1billion at the Senate Hearing (as shown in Table E4 below). We could not verify the 68 Appendix 6.1.1 – Valuation of crude oil revenue (NPDC section) 69 Appendix 6.1.3 – Estimated valuation of extra NPDC liftings captured by DPR Confidential information for the sole benefit and use of the <strong>Audit</strong>or-General for the Federation. PwC 85
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