Audit-Report-on-NNPC

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Investigative Forensic audit of crude oil revenues and remittances by NNPC (January 2012 – July 2013) From the table above, our investigation revealed that the unremitted figure from NPDC liftings is $5.11billion. The reduction from the Reconciliation Committee’s $6billion is due to an increased revenue figure of $6.8billion (as explained in Section 4.5.4.2), as well as verified taxes and royalties (amounting to $1.7billion) paid in cash by NPDC to DPR and FIRS which have already been remitted to the Federation Account. Vanguardngr Confidential information for the sole benefit and use of the <strong>Audit</strong>or-General for the Federation. PwC 88
Investigative Forensic audit of crude oil revenues and remittances by NNPC (January 2012 – July 2013) 4.6. Pipeline Maintenance and Management Costs 4.6.1. Introduction NNPC, stated that $0.91billion had been incurred on Pipeline Maintenance and Management during the review period. During the Senate Public hearing, the Corporation provided a breakdown of the Pipeline Maintenance and Management costs for the period January 2012 to July 2013. The costs are NNPC/PPMC internally generated costs incurred during the period, which they funded from the crude oil sales revenue before remitting to the Federation Account. The Corporation provided internal payment vouchers, approval memos and correspondences, contract awards, and remittance advices; to authenticate their claims. We have reviewed and analysed the alleged costs claimed by NNPC, assessed the reasonableness of the claims, and matched information with sufficient support documents, in order to confirm the claim that $0.91billion of the unremitted oil revenue was incurred on pipeline maintenance and management costs. NNPC categorized the pipeline maintenance and management costs into the following: 1. Salaries and Upfront benefits of PPMC staff 2. Pipeline Vandalism Repair Cost 3. Pipeline Surveillance and Security Cost 4. Alternative Crude Oil Transport Cost –via Marine 5. Environmental Remediation and Community Cost 6. Management Charge out Rate 7. Capital Expenditure (CAPEX) Components of the Cost Salaries and Upfront Benefits of PPMC Pipeline and Product Marketing Company (PPMC) is a fully owned subsidiary of the Nigerian National Petroleum Corporation (NNPC) responsible for the administration of the local refineries in Nigeria. They also act as the dominant supplier of all refined petroleum products 72 . NNPC claimed the sum of $320,971,870.60 as salary payment to PPMC’s staff for January 2012 to July 2013. These costs relate to salaries and upfront payments made to PPMC staff whose functions are directly related to the supply and distribution of refined products in Nigeria. Pipeline Vandalism Repair Cost These were costs of repair of the pipelines vandalized across Nigeria. A total sum of $11,896,654.70 was claimed as repair cost between January 2012 and July 2013. Pipeline Surveillance Cost Vanguardngr These were payments to security agencies to facilitate logistics and the deployment of military men and Police officers to NNPC’s pipelines nationwide and also the cost of maintaining the Pipelines 72 Source: PPMC’s website Confidential information for the sole benefit and use of the <strong>Audit</strong>or-General for the Federation. PwC 89
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Audit-Report-on-NNPC

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