Audit-Report-on-NNPC

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Investigative Forensic audit of crude oil revenues and remittances by NNPC (January 2012 – July 2013) reasonableness of this estimate as we were not provided with details of NPDC costs within the review period. Summary of NPDC’s estimate of PPT accruable to the Federation Description Liability (US $) Paid ($) Made up of: NPDC Traditional assets 525,231,949 440,893,530 Divested assets assigned to NPDC 502,851,116 422,106,470 Total government entitlement 1,028,083,065 863,000,000 Table E4 – Summary of NPDC’s PPT estimates Source: NPDC Submission to the Senate 4.5.4.4. Cash payments by NPDC to DPR not captured by Reconciliation Committee NPDC’s submission to the Senate indicates a total cash Royalty payment of $869million, related to liftings during the review period. However, DPR submitted 70 to the Senate Committee that $864 million was received. Cash payments made by NPDC to DPR Date/period of payments Amount ($) March 2013 71,539,940 April 2013 85,363,271 May 2013 60,159,720 June 2013 6,834,004 October 2013 278,934,251 November 2013 215,910,921 February 2014 120,249,512 Total payments 838,991,619 Table E5 – Summary of NPDC cash payments to DPR for liftings during review period Of the total $864,817,552 reported by DPR, we were able to trace the above receipts to DPR/CBN JP Morgan Account; thereby showing an under-remittance of $25,825,934 to the account. In an e-mail dated 8 October 2014 71 , DPR confirmed to us that the variance of $25.8 million was due to an error of duplicating the same payment on the schedule provided at the Senate Hearing. The total amount received from NPDC was therefore not $864 million but $838 million. It is also important to note NPDC’s assertion that these statutory payments were made on the basis of estimates as summarized below. 70 Source: DPR’s submission to the Senate 71 See Exhibit E1Vanguardngr Confidential information for the sole benefit and use of the <strong>Audit</strong>or-General for the Federation. PwC 86
Investigative Forensic audit of crude oil revenues and remittances by NNPC (January 2012 – July 2013) Summary of NPDC’s estimate of Royalty accruable to the Federation Description Liability ($) Paid ($) Made up of: NPDC Traditional assets 493,069,309 541,086,319 Divested assets assigned to NPDC 654,483,062 328,903,740 Total government entitlement 1,147,552,371 869,990,059 Table E6 – Summary of NPDC’s Royalty estimates Source: NPDC Submission to the Senate We could not verify the reasonableness of this estimate as we were not provided with detailed breakdown of NPDC’s liftings by oil licences and period of lifting in order to determine an expectation for Royalties due. 4.5.5. Summary of findings Summary of findings 7 6 5 4 3 2 1 0 Reconciliation committee $6 bn Value $0.89 bn $5.11 bn Decrease Unremitted balance From the above sections, we have determined the impact of NPDC liftings on the alleged unremitted funds as $5.11billion. The variance between this amount and the $6 billion quoted by the Senate is shown in the table below: Impact of NPDC liftings on alleged remittance shortfalls Reconciliation PwC Variance Committee Investigation Description $ $ $ Revenue from total assets 6,000,000,000 6,815,188,626 815,188,626 Royalties paid in cash - (838,991,619) (838,991,619) PPT paid in cash - (863,000,000) (863,000,000) Unremitted from NPDC revenue 6,000,000,000 5,113,197,007 (886,802,993) Table E7 – Impact of NPDC liftings on alleged remittance shortfalls Section Adjustm ent ($bn) 4.5.4.2 0.82 4.5.4.3 (0.84) 4.5.4.4 (0.86) T otal (0.89) Vanguardngr Confidential information for the sole benefit and use of the <strong>Audit</strong>or-General for the Federation. PwC 87
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