It is quite remarkable that the Auditor-General of the Federation has released highlights of the forensic audit carried out by the accounting firm of PriceWaterhouse-Coopers (PwC) into the former CBN Governor’s allegation on September 25, 2013 that the Nigerian National Petroleum Corporation (NNPC) had failed to remit US$49.8 billion into the Federation Account (FA) from crude oil liftings during January 2012 through July 2013. At least some light is being shed on the otherwise opaque operations of the nation’s cash cow.
“Based on the information made available to PwC”, the forensic audit report showed that the revenues generated from crude oil liftings during the said period amounted to $69.34 billion and that the sum of $50.81 billion was remitted into the FA. Before then, the Senate Committee on Finance (SCF) had investigated the same allegation and published a report on August 5, 2014 in which “all parties, that is, CBN, NNPC, Ministry of Finance and Ministry of Petroleum Resources had resolved through reconciliation undertaken by them” that the total value of crude oil lifting during the period was $67 billion and remittances into the FA amounted to $47 billion. The forensic audit report, therefore, confirms the conclusion by the SCF that “there was never any unremitted US$49.8 billion”.
However, the PwC recommended that NNPC should remit a minimum of $1.48 billion on account of assets acquired by its subsidiary, Nigerian Petroleum Development Company Limited. Denying any indictment by the forensic audit report for the non-defrayal of the amount, the corporation unconvincingly attributed the long delay of over 10 months till after the release of the audit report to unfinished internal reconciliation process. The implicit admission that a reconciliation exercise at the NNPC lasts forever and a day amounts to unwarranted sophistry which cannot conceal the fraudulent intention to wear out the Federation Account Allocation Committee which had all along been demanding payment of all outstanding accruals to the FA, dull its memory and avoid remitting the amount altogether.
Similarly expressing discomfort over the aspect of the recommendation of the forensic audit report calling for the corporation to meet its costs and expenses entirely from the value it created, the NNPC drew attention, rather gallingly, to the fact that it received “no funding for value destruction through pipeline vandalism, sabotage and crude oil and products theft, an issue that causes enormous losses to NNPC operations.” Why has NNPC become a crybaby rather than face squarely its responsibilities? In parts of the country where the corporation and its joint-venture partners operate, their presence has not impacted positively on the host communities. Even the Senate Committee on Finance in its report, among other NNPC shortcomings, had this to say: “The concept of using vessels loaded with products at high sea as products Strategic Reserve as against the development of sufficient product Tank Farms for Strategic Reserve needs to be reviewed.”
Just imagine the national energy security exposure or risk! In the event of an emergency or serious disagreement with the home countries of the owners of the vessels, the vessels would sail away and Nigeria would keel over within at most one week. Does the NNPC not realise that the cost of keeping its current floating products Strategic Reserve could go a long way towards positively engaging the host communities, winning their confidence and turning them to strategic partners in combating the above value destruction incidents thereby reducing the poverty level in oil producing areas and enhancing national development to boot? Any NNPC helmsman who cannot take necessary steps to bring to the barest minimum the incidents of value destruction, which are often collusively executed by NNPC personnel, within six months of assuming office, does not deserve to retain his appointment for one day longer.
All in all, the former CBN governor’s allegation, albeit unfounded, gave rise to both the SCF investigation of remittance of oil revenue by the NNPC and the PwC forensic audit. Both investigations have shed some light on the otherwise opaque goings-on in the petroleum sector. Among many useful recommendations, the SCF prescribed thus: “inter-agency reconciliation meetings between sensitive economic institutions such as Ministry of Finance, Nigerian National Petroleum Corporation, Central Bank of Nigeria and Federal Inland Revenue Service should be done on regular basis in order to avoid similar episode but most importantly ensure that all revenues are properly and legally accounted for.” This newspaper urges strict adherence to the recommendation and also demands that all information relating to the petroleum sector should be made public through the various mass media platforms available to the agencies concerned.
