Audit-Report-on-NNPC

Investigative Forensic audit of crude oil revenues and remittances by NNPC (January 2012 – July 2013)
I. Pipeline and Products Marketing Company “PPMC”
II.
III.
NNPC through its fully owned subsidiary, PPMC, supplies only to bulk customers in order to meet the
needs for petroleum products and ensure the availability across the country.
PPMC is the product distribution arm of NNPC and is directly responsible for the distribution of
petroleum products. Petroleum products either imported or refined locally are received by PPMC
through pipelines and import jetties and further distributed to depots through pipelines.
Department of Petroleum Resources “DPR”
DPR is the petroleum agency of Nigeria that regulates the pipeline network and supervises all
petroleum industry operations carried out under licenses and leases in the country. One of its major
functions is to keep and update records on petroleum industry operations, particularly on matters
relating to petroleum reserves, production and exports of crude oil, gas and condensate, licenses and
leases as well as rendering regular reports on them to Government. DPR is expected to keep records
of the quantities of crude oil pumped at the terminals and quantities imported or delivered to
refineries for processing.
Independent Surveyors
These are inspection agencies which are usually appointed by the buyer/ marketer to inspect the
quantity and quality of the product being pumped and transferred to the refineries. Examples of
Inspection agencies used are SGS Inspection Agency, General Marine & Oil Services (GMO) Ltd,
Konsult Control Services (KCS) and Marine Technical Services International (Nig.) Ltd (MTSI).
4.7.2. Procedures Performed/ Work Done
Obtained and reviewed NNPC’s submissions during Senate Hearing on crude oil and refined
product losses to understand the claims made.
Held a discussion with the Executive Director of Operations “EDO” and Executive Director
Commercial “EDC” of PPMC to gain understanding of PPMC’s operations and pipeline
network.
Obtained and reviewed the schedule of both crude oil and product losses.
Reviewed the schedule provided to supporting documents from the Independent surveyors, to
ascertain the reasonableness of the claim. Highlighted all discrepancies.
Identified the various volume pumped from terminals and volumes received at the respective
refinery. Identified discrepancies and obtained clarification where necessary.
Obtained the pricing template of the refined product to determine the appropriate rate to
value the refined product losses.
Obtained the monthly average Platt prices to determine the appropriate rate to value the
crude oil losses.
Conducted interviews with relevant process owners to validate understanding of deductions in
the period under review.
Documented findings and conclusions.
4.7.3. Limitations
Vanguardngr
There were no independent support documents to verify the correctness of the quantities for the
refined product losses. The documents used were monthly reconciliation reports of the different
PPMC’s operations centers.
Confidential information for the sole benefit and use of the <strong>Audit</strong>or-General for the Federation.
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