Here Are Some Highlights of PWC Audit Report of NNPC Accounts. The report is about 200 page, President Jonathan ordered the release of the audit report yesterday. CLICK HERE TO DOWNLOAD FULL REPORT


Highlights

“The procedures we performed did not constitute an examination or a review in accordance with generally accepted auditing standards or attestation standards. Accordingly, we provide no opinion, attestation or other form of assurance with respect to our work or the information upon which our work was based” — PWC


Nigerian Petroleum Development Company (NPDC) and CBN refused to open their financial statement to PWC. How can these two major parties refuse to cooperate with the auditor.

“We requested for meetings and information from the Central Bank of Nigeria (“CBN”) but were not granted access to nor given the requested information by the CBN” page 196 — PWC
“We requested for meetings and information from the Nigeria Petroleum Development Company (“NPDC”) but were not granted access to nor given the requested information by the NPDC” page 196 — PWC



“We did not have access to NPDC’s full accounts and records and we have not ascertained the amount of costs and expenses which should be applied to the US$5.11billion Crude Oil revenue (net of royalties and PPT paid) per the NPDC submission to the Senate Committee which should be considered as dividend payment by NPDC to NNPC for ultimate remittance to the Federation Account.” — PWC



We did not obtain any information directly from NPDC, but in accordance with NPDC former Managing Director’s (Mr Briggs Victor) submission to the Senate Committee hearing on the subject matter, for the period, NPDC generated $5.11billion (net of royalties and petroleum profits tax paid).

We have relied on the Legal Opinion provided to the Senate Committee by the Attorney General (AG) on the subject of the transfers of various NNPC (55%) portion of Oil leases (OMLs) involved in the Shell (SPDC) Divestments which impact crude oil flows in the period. The AG’s opinion indicated that these transfers were within the authority of the Minister to make. Thus, these assets were validly transferred to NPDC. The same AG’s Legal Opinion also indicated that NPDC was to make payments for Net Revenue (dividend) to NNPC, which should ultimately be remitted to the Federation Account. A sale will mean the following should be due to be remitted to the Federation accounts

Petroleum Profit Taxes (PPT)
Royalties
Signature bonus payment
Dividend from profit for the period (according to dividend declared in line with NPDC’s dividend policy)
We have not obtained any information that suggests that NPDC has been assessed for PPT and Royalty for the review period. However, as disclosed by the former MD of NPDC at the senate hearing, 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. — PWC


In certain instances where we were not provided with information or access to key stakeholders (Section 6.3.2 ) we leveraged on external and available sources of information to reach our conclusions. These external and available sources of information are clearly highlighted in the relevant sections of this report.

Any information and/or documentation which may come to our attention subsequent to the date of this report may alter our findings. — PWC


No supporting documents were provided for the $0.25billion claimed as NPA Charges. Page 105 — PWC


Environmental Remediation
The following claims, totalling $10,257,161.07 could not be substantiated due to insufficient documents:
1.N442,975,320 ($2,846,296.53) payment in February 2012
2. N1,146,831,287.12 ($7,410,864.54) payment to settle PPMC’s outstanding third party liability in May 2013 Page 94 — PWC



A total of $59,324,737.01 ($59.3) Million on Charter Hire Services could not be substantiated due to lack of supporting document. — PWC



MT Tuma and MT Olobiri
Out of the $17,767,683.54 claimed as payments for manning and management fee of MT Tuma and MT Olobiri, the sum of $6,658,588.74 could not be substantiated due to lack of supporting documents. — PWC


http://www.newsheadlines.com.ng/latest-news/2015/04/28/highlights-of-pwc-audit-report-of-nnpc-accounts/

Crude Transport
The total claim of $5,457,006.98 out of the total claim $46,265,215.13 could not be substantiated due to lack of supporting documents. NNPC claimed the sum of $46,265,215.13 as crude transport payments during the review period, which was incurred on crude oil transportation from Escravos terminals to Warri refinery jetty using marine vessels. The supporting documents provided were third party invoices for the service rendered, NNPC Payment vouchers and NNPC Remittance advices. — PWC


Marine throughput
The sum of $6,707,826.05 could not be substantiated due to lack of supporting document — PWC


Capital Expenditure – CAPEX
The sum of $27,179,005.48 could not be substantiated due to insufficient supporting documents. The total amount verified as Capital expenditure was $96,073,430.27 ($96million). — PWC



No amount has been substantiated for the total claim on Pipeline Vandalism and Repair Cost of $11,896,654.71 and on Management Charge out Rate claim of $59,712,530.83.We were not provided with supporting documents for the costs. — PWC

In January 2015 (subsequent to our initial reported conclusions), we were availed with copies of Deeds of Assignment for OML’s 26,30,40,42. We were not provided with copies of Deeds of Assignment for OML’s 4,38,41,34. We were also provided with information which indicated that the various NNPC (55%) portion of Oil leases (OMLs) involved in the Shell Divestments related to the eight ( OML’s aforestated, were transferred to NPDC for an aggregate Sum of US$1.85billion. So far, only the amount of US$100m had been remitted in relation to these assets. This means that the amount of US$1.75billion is yet to be remitted in relation to this transfer. In addition, by a comparison of the aggregate amount of US$1.85billion determined by DPR as the transfer value , and the (arm’s length) commercial value paid for by 3rd
parties for between 30% to 45% divested by Shell, we arrive at an estimated Alternative Commercial Valuation of US$3.4billion for the NNPC 55%. The point here is that while we appreciate that this is a government entity to government entity transaction, we had expected a transfer basis higher than the US$1.85billion commercial value determined by DPR.

– The total amount remitted from sale of domestic crude amounted to $14.5 billion from our analysis. This is about half of the total revenue generated from domestic crude sales and $1.5 billion lower than the amount claimed by NNPC as shown in the table below;

SOURCE Values ($)
Total Revenue 28,215,731,691
Total remitted 14,542,654,329
Difference 13,673,077,362

– The Senate Committee set up to investigate the alleged unremitted crude oil revenue for the Federation requested for submissions from elevant parties including CBN and NNPC. In addition, the Ministry of Finance set up a Reconciliation Committee (consisting of CBN, NNPC, DPR, FIRS, OAGF, the Budget Office of the Federation, Federal Ministry of Finance and Federal Ministry of Petroleum Resources) to align the differing figures that were being reported and a final reconciled remittance figure of $47 billion was agreed. page-70 — PWC


“By selling DPK to marketers at N49.90 and claiming subsidy at an Ex-depot price of N34.51 without adjusting Landing Costs for extra cost Bourne by the marketers, NNPC had over deducted subsidies to an estimated amount of N31,522,234,881.06 ($204 million)”
Page 29. — PWC


“For the period under review, NPDC made several payments to DPR based on self-estimated royalty.
We traced several cash payments made by the company to CBN/ DPR JP Morgan account statement, to the tune of $839 million”. – Page 29 — PWC

Where's the missing $48billion (according to Sanusi)?