$49.8bn Missing Oil Money: It Is A Lie–PriceWaterhouseCoopers

PriceWaterhouseCoopers, the global audit firm contracted by the Federal Government to audit the financial accounts of Nigerian National Petroleum Corporation (NNPC) has concluded its work and declared that no such amount was missing.

The firm reviewed NNPC accounts from 2010 to date and concluded in its report to Mrs Diezani Alison-Madueke, Minister of Petroleum Resources that the data used by Central Bank of Nigeria (CBN) to calculate the quantum of crude oil exported and the accrued revenue were wrong.

CBN Governor Sanusi Lamido Sanusi had said for the 19 months from January 2012 to July 2013, NNPC lifted 59,024,107 barrels of crude oil valued at $65,332,350,514.57. But it remitted to the Federation Account only $15,528,410,098.77 or 24 percent of the amount it should have collected.

The audit report faulted the data used by the CBN governor saying that the correct data were with the Department of Petroleum Resources (DPR) and that statistics provided by a CBN unit did not tally with those from DPR.

PriceWaterhouseCoopers also faulted CBN on grounds of double-counting and narrow coverage of revenue statistics, adding that CBN did not question production figures which could have provided the basis for the allegation of missing billions of naira.

The auditors said they checked all the books covering those of Federal Inland Revenue Service (FIRS), DPR and NNPC relating to oil revenues and production, concluding that no such huge fund was missing.

“We had a review meeting with NNPC and the report showed that nothing is missing. The minister will soon make the report public.

“But this week’s meeting with CBN will also shed light on where the CBN governor got his data from,” an auditing official told newsmen.

Central Bank of Nigeria (CBN) is planned to meet Nigerian National Petroleum Corporation (NNPC), Department of Petroleum Resources (DPR) and Federal Inland Revenue Service (FIRS) officials on Tuesday to reconcile the different data.

NNPC Claims CBN's Allegation is Political

14 Dec 2013

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Group Managing Director of NNPC, Andrew Yakubu

• Says apex bank privy to oil revenue documentations

By Chineme Okafor

Barely 24 hours after the Central Bank of Nigeria expressed concern over alleged politicisation of the letter written by its Governor, Sanusi Lamido Sanusi, to President Goodluck Jonathan notifying him of the non-remittance of $49.8 billion oil revenues into the Federation Account by the Nigerian National Petroleum Corporation (NNPC), the corporation has responded, saying the CBN is actually the one playing politics with the issue.

The Group Managing Director of NNPC, Andrew Yakubu, at a press briefing in Abuja stated that he was forced to believe that the CBN may have decided to add to Nigeria’s already heated political atmosphere with the letter.

Said Yakubu: “I want to say that the allegation is unfounded, baseless and has become a political instrument in the current politically- charged environment."

Yakubu said the NNPC was taking aback by the CBN letter because the issue came up about four months ago.

“In fact, we made our clarification through our honourable minister of petroleum resources, four months ago and for it to surface at this time that the political atmosphere is charged, we find it difficult because we are also taken aback and it is left for you journalists to do your investigations and unravel the reasons behind all these," he said.

The NNPC boss said, “As you are well aware, it is not in our character to join issues or trade blames with other agencies of government. But considering the high level of publicity that the recent letter from the CBN to the President has generated, and the erroneous impression it has created among Nigerians. It has become necessary to set the records straight.

“The statement credited to the CBN governor that NNPC has failed to remit the sum of $49.8bn representing 76% of total national oil receipts is borne out of lack of understanding of how revenues from crude oil sales are remitted into the Federation Account.”

He said NNPC crude oil liftings are made up of Equity Crude, Royalty Oil, Tax Oil, Volume for Third Party Financing and NPDC equity volume.

“It is important to stress that remittances of proceeds from the above liftings are made according to statutory and production arrangements.

Accordingly, proceeds from Equity Crude are paid by NNPC into the Federation Account which is held by the Central Bank of Nigeria. Proceeds from Royalty Oil are paid to Department of Petroleum Resources, DPR, whose designated account is managed by the same CBN.

“Similarly, the proceeds from Tax Oil or Petroleum Profit Tax lifted by NNPC are paid directly into the Federal Inland Revenue Service account also managed by the CBN.

"In the same vein, Third Party Finance and Trial Marketing volume are paid into designated Escrow accounts, while NPDC equity proceeds are remitted to NPDC account. It should now be clear to all that NNPC by statutory requirement is responsible for direct remittances of only one stream of liftings, namely Equity Crude.”

Yakubu said that proceeds from the total NNPC liftings comprising Federation Equity, Royalty Oil, Tax Oil, Volume for Third Party Finance, NPDC equity and volume for Trial Marketing Period amounted to US$67.12bn as against the $65.33bn that the CBN stated.

“At this point, we wish to categorically state that all the proceeds amounting to $67.12bn have been remitted as statutorily required. NNPC remitted its portion which is $18.48bn into the Federation Account being the total proceeds from Equity Crude and gas sales. This represents 27.5% of total proceeds of $67.12bn as against the 24% declared by CBN.

“On the issue of US$49.8 billion or 76% of total national liftings and the alleged unremitted funds, we would like to clarify that this represents the proceeds from Royalty and Petroleum Profit Tax liftings. These, as I stated earlier, are remitted to the Department of Petroleum Resources (DPR) and the Federal Inland Revenue Service (FIRS) which are statutorily empowered to collect and remit same into the Federation Account.”

Yakubu explained that CBN’s decision to come up with the issue, four months after it was allegedly discovered was suspicious, adding that it would be appropriate for the Nigerian media to thoroughly investigate the underlying intentions of the CBN with regards to the issue.

He said: "We are taken aback because in my presentation, you saw clearly that there was hardly any operation that the NNPC does alone.

“It is a multi-agency transaction and right from our production containment and entitlements meetings, all the various agencies that are involved in crude oil production are involved in the meetings and reconciliation is done with lifting numbers agreed and signed off before the lifting of our crude oil.

“Operations at the terminals are also done by all the various agencies and particularly championed by the regulatory agencies that are the arbiters of numbers and superintend over the process. NNPC is not a sole player in the entire business of the oil and gas value chain; so, our functions are purely professional and we also have avenues to reconcile from time to time and we have no option whatsoever to determine the reconciliation of the numbers and our operations with all other agencies.”

Speaking on CBN’s knowledge of the crude oil revenue processes, Yakubu explained: “All the documents are there and the data was collated from them. I will not say that the CBN is not aware of all these because they are always at the documentation and reconciliation meetings; they also signed off on the documents that is why I will continue to say that we are all dumbfounded because we are always available for any form of clarification by any agency of government and particularly that the honourable minister ordered this audit months ago before we even got the letter from the CBN.

“You can imagine that the letter came four months ago and it took a snapshot of 18 months. So, why would we wait for 18 months before we write a letter of a very serious issue like this; $49 billion is not a small money; it is an amount that can even shake the US economy and not one that you can just stock under your shelves. That is why we always make sure that our records are always intact.”

Yakubu who also noted that the NNPC does not withhold crude oil receipts due to the federation account or any statutory remittance, added: “The CBN letter claims that for the period 1st January 2012 to 31st July 2013, total national crude oil lifting was 1.287 billion barrels. Our records show that the total national crude lifting for the same period was actually higher at 1.330 billion barrels. Furthermore, total NNPC lifting during the same period was again higher at 618.552 million barrels as against the 594.024 million barrels stated by CBN.”

On the audit exercise being undertaken by PricewatershouseCoopers (PwC) on the operations of NNPC, Yakubu said: “It was ordered by the minister of petroleum resources some months ago and they are about rounding off the audit exercise; it is normal. Last year, we had a similar one and we are supposed to go through an audit on regular basis, that is ongoing and will soon be concluded and handed over to the honourable minister.”

The CBN had on Thursday sought to provide clarifications on the letter written by Sanusi in relation to its role. It said: “In the performance of this role, it is natural for the CBN to be concerned at the low level of accretion to reserves and the ECA, in spite of strong international oil prices, especially as Nigeria’s performance is compared with oil producing economies.”

what is your verdict btw this two.

.

ok for now

There's nothing much to debate any way we are waiting for the resolution at the end of today,we will get the full datails but it's clear that Sanusi will not make out anything from this.

Cbn is plain mischievious to say the least

PricewaterhouseCoopers has been fined a record £1.4m and given a rare "severe reprimand" by the accountancy regulator over the failure of investment bank JP Morgan to safeguard billions of pounds of clients' assets.

The Accountancy and Actuarial Discipline Board (AADB) said PwC had admitted its standards had fallen short after it allowed the UK securities arm of JP Morgan to appear to be complying with rules requiring client money to be kept separate from the bank's own funds between 2002 and 2008.

The fine against PwC, which had admitted in August to years of mistakes, was eventually determined after a discussion among regulators which had suggested the penalty could be as high as £44m.

PwC had been required to submit a report to the FSA on whether JP Morgan complied with its client money rules and had the internal systems to ensure this was the case. While PwC had done so for each of the seven years in question, JP Morgan had not, in fact, been complying with the rules. The errors meant that an average of £5bn of client money was at risk each day.

The AADB said: "PwC admitted that it failed to obtain sufficient appropriate evidence on which to base these opinions and failed to identify and consequently did not report that [JP Morgan] had not at all times held client money separate from the firm's money and/or had not taken the necessary steps to ensure that client money was held at all times in an account identified separately from any accounts used to hold money belonging to [JP Morgan] , in breach of the client money rules."

The action by the accountancy profession comes after JP Morgan was fined £33m by the Financial Services Authority – the largest penalty imposed by the regulator – in June 2010 for failing to segregate client money from its own funds over a seven-year period.

Lack of segregation became a key issue for the FSA after Lehman Brothers collapsed in September 2008. It was discovered to have mixed together its own funds and those of its clients, leaving customers such as hedge funds with concerns about their assets.

The AADB said its tribunal found that PwC had committed misconduct in respect of each allegation in the disciplinary complaints that had been put before it, and found the misconduct to be "very serious". It imposed a "severe reprimand" on PwC. "A global organisation with the resources of PwC … should never place itself in a position in which an elementary inquiry as to the final destination of client money is not properly answered, and no check is made of the banker holding client money as to its treatment of money, whether the banker is an entirely separate entity or an associate company in the same group," it said.

The fine of £1.4m – reduced from £2m because PwC co-operated with the AADB investigation– is the biggest levied by accountancy bodies in the UK and surpasses the £1.2m of penalties related to the auditors of companies connected to Robert Maxwell. However, that £1.2m figure would now amount to £1.6m if adjusted for inflation in the intervening period.

Penalties more usually range from £17,000 to £500,000 and more often are connected to the size of the audit fee collected by the accountancy firm.

But the decision by the tribunal showed that on this occasion it had considered whether the fine should be as high as £44m. PwC had argued for a £500,000 fine.

PwC said: "We are pleased that this matter has now been concluded. We regret that one aspect of our work on the private client money report to the FSA fell beneath our usual high standards. When the issue was identified, and before any complaint had arisen, we took action to ensure that staff received additional training in the client monies area."

http://www.theguardian.com/business/2012/jan/06/financial-sector-jpmorgan

Not exactly credible"
Go read about the Authur Andersen scandal

please i want the final conclusion on this mind boggling 50billion dollars!

Av always know CBN was playing pure politics. Sanusi using dis to dent ur employers image is dumb, stupid and rash to say the least.

Thanx to SLS. We need more of his kind in 9ja. But must we engage in rascality to get everythng 4rm fed govt? I remember militants and now ASUU. They are evn considering boko boys.

The reason why people like Sanusi can claim $50B missing from the NNPC crude sales is because they know Nigeria as a country is filled with silly people. Any serious minded person will simply laugh at any claim like this. But, this is Nigeria, where people believe, you can take a human, and magically convert them into money. Sanusi, should educate Nigerians about, how much we earn from Oil yearly in real numbers. Not this bogus lie of Nigeria exporting 2.5M barrels of crude daily. Give Nigerians, the breakdown, what belongs to Nigeria in the so called 2.5M barrels, what belongs to Shell, Exxon and Chevron, what is allocated to NNPC for local consumption and finally how many barrels are truly sold on behalf of the Nigerian people. It is so sad the CBN gov is telling the whole world, I don't have an idea how the primary source of foreign exchange, is generated in my country.

Sanusi should simply resign or get booted out for this show of incompetence.

@bloggernaija

PwC said: "We are pleased that this matter has now been concluded. We regret that one aspect of our work on the private client money report to the FSA fell beneath our usual high standards. When the issue was identified, and before any complaint had arisen, we took action to ensure that staff received additional training in the client monies area."

what do you think this piece shows about PWC?

I don't blame Sanusi but the person that appointed Islamic teacher that specialized in teaching Islamic religion only as CBN governor,

Sanusi should just come clean and clear the air on this mess he created. You don't just extract data from nowhere and make such spurious claims- that NNPC kept back an amount greater than our entire foreign reserve which has taken us years to build...greater than our national budget of which this same oil is the major source of funding...carefully hidden despite all the probes and audits both local and international...Nobody noticed a certain $50billion missing, nobody until Sanusi came to the rescue with his letter...
It beggars belief, SANUSI should come clean...

If Sanusi is now clear about how funds are remitted by the NNPC et al, he should swallow his pride and explain to Nigerians what he has learned and subsequently apologize for getting everyone worked up over nothing. Let's just assume he didn't intentionally mislead the people to undermine the Government.

4Wilywily: I don't blame Sanusi but the person that appointed Islamic teacher that specialized in teaching Islamic religion only as CBN governor,

I don't blame Jonathan, I only blame the people that support a zoo-keeper as president.

Abegi joor, was it not the same price water house that were the external auditors of the defunct intercontinental, phb and oceanic banks and saw nothing wrong with their loan books until cbns hammer came hard on the banks. Na today