More Trouble For NNPC, Failed to Remit N936b 2012 Crude Sales Proceeds, Others
BEVERLY HILLS, July 05, (THEWILL) – The Nigerian National Petroleum Corporation (NNPC) did not remit into the account of the federation N936 billion being proceeds from the sale of crude in 2012, an audit report sent to the National Assembly by the Office of the Auditor-General for the Federation has revealed.
The revelation amongst several other indictments exposes further the sleaze and high level of corruption in the state owned Oil Company, which operates a complex, opaque and secretive accounting system.
According to the details of the audit report which was first published in the Sunday Trust, it revealed several infractions by the corporation such as under-remittances, non-declaration of incomes, non-payment of joint venture cash call arrears, excessive domestic crude oil lifting, over-deduction of subsidy approvals, abuse of fuel importation processes and inadequate accounting records.
A similar report for 2013, with damning revelations had also been prepared by the AGF and sent to the National Assembly, the paper said.
The 2012 report said the NNPC didn’t remit accruals from the sales of crude oil to the tune of N936 billion within the same period at which it embarked on the refund of a N450bn sum, being a previous under-remittance, to the Federation Account.
It equally came to light, that despite the fact that the NNPC earned a total sum of $998.881.77 as interest on its Joint Venture Cash Call Account (JVCCA) in 2012, it didn't provide budget for the amount received just as it was found culpable in the non-remittance of $1.6 million and N171 million, being arrears of the Joint Venture Cash Calls (JVCC) in the period under review.
The corporation and NAPIMS, one of its subsidiaries, had a drawback on its Cash Call of $1,664,986.15 and N171, 303,701, thereby slowing down the general output of the joint venture operators, the report said.
The report, signed by the AGF, asked the then Group Managing Director (GMD) of the NNPC, through the Accountant-General of the Federation, to explain “the flagrant attitude of withholding domestic crude oil sales revenue” and ordered the NNPC to refund the withheld amount (N936.027bn) urgently. The recovery particulars, the AGF directed, should be forwarded to his office for verification.
The report also discovered that the joint venture operators omitted Management Reports (Letter of weakness), the crucial supporting documents detailing weaknesses observed by the auditor in the internal control system of the audited entity.
The corporation, according to the report, faltered in recovering total debts of $75m from more than 50 foreign crude oil customers within the period of 5-13 years. The foreign companies the report fingered were: Vitol S.A. (Gas), NIPCO, NLNG, TEMA, Vitol SA (Gas), Arcadia, Kyokuto and Coast Oil.
It also found that without a mandate or authority, the NNPC allegedly moved a sum of $50m from the NNPC/JP Morgan account, where proceeds from the sales of Nigerian crude are deposited, to another unidentified foreign account.
The report indicated that the NNPC in 2012 deducted N260 billion instead of N229 billion at source from the proceeds of crude oil and gas sales approved by the PPPRA. This is in addition to infractions in which subsidy claims were not subjected to the usual practice of pre-payment audit by auditors appointed by the Federal Ministry of Finance before or after subsidy had been claimed by the NNPC.
The report did not spare the Department of Petroleum Resources (DPR), which it said failed to remit N109.7b unpaid royalty from 21 oil companies in 2012, just as it allegedly failed to account for N2.1b gas flaring penalty owed by 33 oil companies.
Confirming the authenticity of the report, which has since been sent to the National Assembly for appropriate action, the Auditor-General for the Federation Mr. Samuel Ukura, said the NNPC and other agencies indicted in the report are yet to respond to queries issued to them.