NNPC?s missing fund topples to a whooping $1.48bn

The PriceWaterhouseC­oppers (PwC) audit of the accounts of the Nigerian National Petroleum Corpo­ration (NNPC) has revealed that a minimum of $1.48 bil­lion is missing from the fed­eration account.
Auditor-General of the Federation, Mr. Ukura Sam­uel, disclosed this yesterday in Abuja while addressing journalists on the highlights of the PwC report.
President Goodluck Jona­than had requested the firm to audit the accounts of the corporation last year follow­ing allegations by former Central Bank Governor, Sanusi Lamido Sanusi that about $49 billion was miss­ing from the NNPC accounts. Sanusi, now Emir of Kano, later put the sum at $20 bil­lion. He again reviewed the sum downward to $12billion.
The Auditor-General of the Federation said the PwC report centered on NNPC Costs; Ownership of NPDC revenues and Kerosine (DPK) subsidy.
He said: ?Based on the in­formation available to PwC, and from analysis, the firm submitted that NNPC and NPDC should refund to the Federation Accounts a mini­mum of $1.48 billion.?
Before presenting the PwC audit highlights to news­men yesterday, Mr Samuel clarified that under the laws, President Jonathan could not direct him to release the highlights or complete de­tails of any report but could only request for the release of the highlights.
He said his office is man­dated to submit its report to the National Assembly and not to the Presidency.
With regards to NNPC cost, from where the various double digit billion of dol­lars was alleged to have gone missing, the PwC report berated NNPC?s operations which it described as ?an un­sustainable model.?
The report said in the pe­riod under review, 46 per cent of proceeds of domestic crude oil revenues was spent on operations and subsidies, while the corporation could not sustain monthly remit­tances to the Federation Ac­count Allocation Committee (FAAC).
It said the corporation could also not meet its opera­tional costs entirely from the proceeds of domestic crude oil revenues and had to incur third party liabilities to bridge the funding gap.
The report stated that NNPC provided transaction documents representing additional cost of $2.81 billion related to the period, with the corporation citing the NNPC Act LFN No 33 of 1977 that allowed for such deductions.
However, the report said foreign auditors were at a loss ?whether such deductions should be made by NNPC as a first line charge before remitting the net proceeds of domestic crude to the federation accounts.?
Based on this, the auditing firm recommended that ?the NNPC model of operation must be urgently reviewed and restructured, as the current model which has been in operation since the creation of the NNPC cannot be sustained.?
The report stated that NPDC generated $5.11 billion (net of royalties and petroleum profit tax paid), relied on the legal opinion provided to Senate Committee by the Attorney-General on the subject of the transfers of NNPC?s 55 per cent portion of oil leases (OMLs) involved in the Shell (SPDC) divestments which impacted crude oil revenues in the period.
The firm noted that ?the Attorney-General?s opinion indicated that these transfers were within the authority of the minister of petroleum resources to make.?
It added that ?NNPC?s 55 per cent portion of oil lease (OMLs) involved in the Shell divestments related to the eight OMLs were transferred to NPDC for an aggregate amount of US$1.85 billion.
?So far, only the amount of the US$100 million had been remitted. PwC also added that they had expected a transfer basis higher than the US$1.85 billion earlier mentioned.?
PwC reported that ?NPDC had done a self-assessment of PPT and Royalty and had unpaid self-assessed PPT and Royalty to the tune of $0.47 billion related to the review period, adding that it did not obtain any information that suggested that NPDC has been assessed for PPT and Royalty for the review period.?