NNPC Accused of Withholding $16.2 Billion Oil Export Proceeds, Report Says

(LAGOS)

State oil firm Nigerian National Petroleum Corp. failed to remit Naira 3.2 trillion ($16.2 billion) in proceeds from the sale of crude oil into the government account in 2014, local media reported Auditor-General Samuel Ukura as saying Tuesday.

A further $235.68 million from the proceeds of gas feedstock sales to Nigeria LNG Ltd., owners of the six train Bonny LNG plant, was not paid to the Federation Account and instead transferred to undisclosed Escrow accounts, Punch newspaper reported Ukura as saying in an audit.

A spokesman for the NNPC said the corporation was studying the report.

“It is an audit report and we are still studying before making our position known,” he said.

NLNG declined comment.

NNPC, which manages the Nigerian government’s average 57% interests in joint venture oil operations with foreign oil companies, exports Nigeria’s share of the crude oil produced, which totals around 1.6 million b/d.

The corporation also handles 450,000 b/d of crude for domestic consumption. It refines a small fraction locally and exports a larger share, either swapping it for oil products or offshore processing into petroleum products.

The Auditor General’s report covered the same time period that former central bank governor Lamido Sanusi said NNPC had failed to remit to government coffers $20 billion in oil exports proceeds.

Leading audit firm PricewaterhouseCoopers, contracted by the former administration of Goodluck Jonathan to investigate the claim, absolved NNPC of culpability over that allegation. Jonathan later fired Sanusi.

Jonathan’s successor Muhammadu Buhari has made the clean-up of Nigeria’s oil industry, and NNPC in particular, of corruption his top priority.

As part of the clean-up, he has ordered the termination of crude swap for oil products deals and offshore processing agreements and approved a major reorganization of the NNPC.

Junior petroleum minister Emmanuel Kachikwu last week announced the creation of five key business units in NNPC as part of the reorganization of the company.

(Source: PLATTS)