The House of Representatives has called for a forensic audit of the Nigerian National Petroleum Company Limited to determine its assets and liabilities as well as its current market value.

According to the House, the audit has become necessary due to the metamorphosis of the Nigerian National Petroleum Corporation into a limited liability company.




The House’s Ad Hoc committee on NNPCL’s assets and liabilities in its report which was presented to the legislature on Tuesday, claimed that its findings showed that asset worth $64bn (about N28tn) was unveiled by former President Muhammedu Buhari but during the transfer, only $58.8bn (N26tn at the official rate of N450 to $1) was transferred, leaving a balance of N2tn unaccounted for.

It recommended that NNPCL should re-assess its accounting system.

The committee presented its report a week after the Group Chief Executive Officer of the NNPCL, Mele Kyari, said the Federal Government still owed the company N2.8tn that it had spent on petrol subsidy.

The House on December 1, 2021, resolved to set up an ad hoc committee to determine the assets and liabilities of the NNPC before it was fully privatised as prescribed by the Petroleum Industry Act, which was to carry out the exercise within eight weeks.

The probe was based on a motion moved by a member, Ibrahim Isiaka, titled ‘Need to ascertain the total consolidated inventory, assets, interests and liabilities of the Nigerian National Petroleum Corporation and its subsidiaries before transfer to the NNPC Limited to ensure a glossary accounting system.

Following the enactment of the Petroleum Industry Act, the NNPC and its subsidiaries had been unbundled with the creation of an NNPC Limited, the Nigerian Upstream Regulatory Commission, and the Nigerian Midstream and the Downstream Petroleum Regulatory Authority.

The Corporate Affairs Commission also in September 2021 incorporated the NNPCL in line with the provisions of the PIA.

The House, at the plenary on Tuesday, considered and adopted the report of its ad hoc committee to ascertain the total inventory, assets, interest, and liabilities of the Nigerian National Petroleum Corporation and its subsidiaries.

When contacted, the spokesperson for the NNPCL, Garba-Deen Muhammad, told our correspondent that the firm had nothing to hide and would answer any question from the Reps members.

“They have been asking us questions and we’ve been answering them. So if they have any more questions for us, we will oblige and attend to them.

“We respect them and recognise their rights to perform their functions. NNPCL doesn’t have anything to hide.”

On refineries, he explained that the company would ensure that the facilities deliver up to expectation and was working hard to get the plants running.

In its report, the committee stated, ‘’From findings, asset worth $64bn (about N28tn) was unveiled by Mr President (Buhari) but during transfer, only $58.8bn (N26tn at the official rate of N450 to $1) was transferred, leaving a balance of N2tn unaccounted. NNPCL should be meant to re-assess her accounting system.”

The committee recommended that the NNPCL and Federal Government “should work modalities that will ensure removal of subsidy in accordance with the Petroleum Industry Act that stipulates that subsidy be removed within six months of operation of the PIA.”

The committee also recommended that the investments and operations of international oil companies should “be further investigated and scrutinised” before implementation and Fund for Innovation Development.”

The committee further recommended that “External auditors should audit the liabilities of over N2tn being inherited by NNPC Limited on behalf of the federation. There is a need to further establish the current market values of NNPC, especially under a devalued naira regime.

“The Federal Government should investigate foreign desk offices of NNPC subsidiaries with locations abroad, and make IOCs establish offices in Nigeria and develop a framework that will make the companies answerable to the laws of Nigeria.

“Forensic auditors to first audit all NNPC accounts with all the banks to verify the following: the true amount owed any bank as per loan(s) granted, the exact movements of funds from NNPC accounts as well as overcharges by banks which is a huge amount of money and will be a source of additional revenues to the Federal Government, and the defaulting banks should be made to refund the sum discovered back to NNPC/Federal Government with interest.”

P’Harcourt equipment

.8bn (N26tn at the official rate of N450 to $1) was transferred, leaving a balance of N2tn unaccounted. NNPCL should be meant to re-assess her accounting system.”

The committee recommended that the NNPCL and Federal Government “should work modalities that will ensure removal of subsidy in accordance with the Petroleum Industry Act that stipulates that subsidy be removed within six months of operation of the PIA.”

The committee also recommended that the investments and operations of international oil companies should “be further investigated and scrutinised” before implementation and Fund for Innovation Development.”

The committee further recommended that “External auditors should audit the liabilities of over N2tn being inherited by NNPC Limited on behalf of the federation. There is a need to further establish the current market values of NNPC, especially under a devalued naira regime.

“The Federal Government should investigate foreign desk offices of NNPC subsidiaries with locations abroad, and make IOCs establish offices in Nigeria and develop a framework that will make the companies answerable to the laws of Nigeria.

“Forensic auditors to first audit all NNPC accounts with all the banks to verify the following: the true amount owed any bank as per loan(s) granted, the exact movements of funds from NNPC accounts as well as overcharges by banks which is a huge amount of money and will be a source of additional revenues to the Federal Government, and the defaulting banks should be made to refund the sum discovered back to NNPC/Federal Government with interest.”

P’Harcourt equipment

The report further read in part, “The Ministry of Petroleum Resources; Ministry of Finance, Budget and National Planning; Central Bank of Nigeria, Auditor-General for the Federation and the Accountant-General of the Federation could not provide the committee with the exact monetary value of total assets and liabilities of NNPC. The CBN was only able to provide how much was paid into the Federation Account by NNPC and deposit banks of the organisation.”

The House of Representatives also called on the Federal Government to outsource the nation’s three refineries to international companies.
The refineries have a combined capacity of 410,000 barrels per day, for maximum production

The House also asked the NNPCL to take full responsibility for the delays in rehabilitating the moribund refineries, urging the nation’s oil firm to be sincere with Nigerians on the true state of the facilities.

However, the Trade Union Congress opposed the calls for the privatization of the refineries, describing the move as a ploy by the political elite to sell the assets to their cronies.

The Secretary General of the congress, Nuhu Toro who spoke in an interview with our correspondent in Abuja described the idea as “laughable.”

He said, “It is laughable. They want to sell the refineries to themselves. We don’t agree. It is a no, no. They can’t be allowed to sell our national assets.”

PENGASSAN backs privatisation

But the Petroleum and Natural Gas Senior Staff Association of Nigeria said the call by the National Assembly to allow private entities to run Nigeria’s refineries was in order.

The National Public Relations Officer, PENGASSAN, Kingsley Udoidua, said, “PENGASSAN has always declared what should be done on matters like this. If you look at the NLNG (Nigeria Liquefied Natural Gas Limited) model, it is both the combination of privatisation and the government’s stake in it, which is the model we’ve been canvassing for.

‘’So, if that’s what the National Assembly means, then it is fine because PENGASSAN’s position is that the government should follow the NLNG model. If you study that model, it is partly government and private.’’

The Director General of the Nigeria Employers’ Consultative Association, Wale Oyerinde, emphasised the critical importance of transparency in the privatisation of refineries, as he lent his support to the growing demand for the privatisation of the facilities.

He said, “The oil refineries are some of the many national assets that have faced serious operational challenges for reasons yet unclear. To improve efficiency in the operations of government assets, we believe that transparent privatisation, with Nigerians owning a majority share, will serve the best interest of Nigeria and its citizens.’’
LCCI speaks

Also speaking, the Deputy-President of the Lagos Chamber of Commerce and Industry, Gabriel Idahosa said the refineries should have been privatised a long time ago.

According to him, allowing the private sector to take over the refineries would engender competition which would inevitably lead to growth, similar to what followed the privatisation of the telecommunications sector.

Idahosa said, “We’ve been saying it for over 30 years. At the time that Yar’Adua came in, two of the refineries had already been privatised. They reversed the privatisation, and that is what we have been suffering from till now. If they did not reverse the privatisation at the time, we would not be talking about anything like fuel subsidy or building of refineries.’’

Similarly, an economic expert at Olabisi Onabanjo University, Prof Sheriffdeen Tella, argued that if the refineries were privatised, it would present another avenue for the government to draw in revenue through Company Income Tax, Personal Income Tax, Land Grants, among others.

In the report on the state of the refineries, the House also frowned on the slow rehabilitation of the Port Harcourt Refining Company, blaming the NNPCL and demanding that the contractor be sanctioned for failing to meet some of the terms of the contract.

The committee recommended that the NNPCL should take full advantage of the Petroleum Industry Act 2021 to fast-track the rehabilitation programme of the refineries “for a deregulated business environment and restore the refineries to minimum 90 percent nameplate capacity utilisation.”

So bad🥺

Tower of corruption

What is the ownership structure of the company? It should be made public pls.