• Ministry blames NNPCL, NUPRC for withholding records as Senate orders fresh reconciliation
Sunday Aborisade in Abuja
Federal Ministry of Finance and Nigerian National Petroleum Company Limited (NNPCL) were on Thursday locked in a dispute before the Senate Public Accounts Committee over unresolved financial queries arising from the Nigeria Extractive Industries Transparency Initiative (NEITI) 2021–2023 Oil and Gas Sector Audit Report.
The ministry accused NNPCL and other agencies of failing to provide critical financial records needed to respond to queries bordering on a $3 billion pre-export financing loan, $722.6 million in Nigeria Liquefied Natural Gas (NLNG) dividends and interest, refinery rehabilitation expenditure, and other transactions.
Permanent Secretary of the ministry, Mr Raymond Omachi, made the accusation when he appeared before the committee, chaired by Senator Ibrahim Dankwambo (Gombe North), to answer questions on the financial infractions identified by NEITI.
One of the major queries concerned a $3 billion pre-export financing loan obtained in 2012 to settle subsidy payments.
According to NEITI, the recovery of the loan from monthly federation revenue proceeds under the pre-export financing and Project Eagle agreements remains unclear.
The audit report also queried the payment of $722.6 million by NLNG to NNPC in 2021 as dividends and interest belonging to the federation. It stated that the money was neither remitted to the Federation Account nor properly accounted for.
The report further observed that none of Nigeria’s refineries was operational in 2021, despite about N200 billion reportedly spent on their rehabilitation.
The ministry was also unable to provide satisfactory explanations for $221.283 million in overhead costs incurred by the National Petroleum Investment Management Services (NAPIMS) in 2021.
Responding to the queries, Omachi said the ministry could not directly account for transactions handled by agencies in the petroleum sector, particularly NNPCL and Nigerian Upstream Petroleum Regulatory Commission (NUPRC).
He said the agencies had failed to provide the ministry with the financial records required to reconcile the issues raised by NEITI.
“We don’t have direct involvement in all the issues raised and required provision of financial records from the affected agencies, particularly NNPCL, NUPRC, and others.”
Omachi disclosed that Federal Ministry of Finance had engaged Arthur Andersen LLP, a reputable external audit firm, to conduct a forensic audit of the transactions and reconcile the disputed figures.
He stated, “In resolving the financial issues, we have engaged a reputable external audit firm, Arthur Andersen LLP, to carry out forensic audit on all the transactions for required reconciliation.”
The disclosure, however, failed to satisfy the committee, which questioned the ministry on when the forensic audit report would be ready after the deadline had already been extended twice—from six months to one year.
The permanent secretary subsequently urged the committee to invite NNPCL and NUPRC to appear alongside the ministry so that the agencies could provide direct explanations on the transactions.
He appealed to the committee to use its constitutional powers to compel the agencies to attend the proceedings, stressing that the ministry is ready to confront the issues jointly with the affected institutions.
Omachi said, “I know you have enormous powers that you can use to compel these agencies to appear before us. We are having challenges bringing them to the table so that we can resolve these issues.
“We in the Federal Ministry of Finance are ready to come and sit with them here, so that you can hear directly from them and obtain the necessary explanations and clarifications.”
In his response, Dankwambo directed the permanent secretary to facilitate a joint meeting involving the finance ministry, NNPCL, NUPRC, and any other relevant agencies to resolve the outstanding issues.
The committee chairman said the unresolved queries had implications beyond Nigeria, stressing that the international community was monitoring the country’s handling of its extractive-sector finances.
Dankwambo said, “I will like you to review the internal report and arrange a meeting involving the Ministry of Finance, the NUPRC, NNPC, and any other agency whose participation is necessary to resolve the issues we have raised.
“As you are aware, these issues are being followed by the international community. They are not matters confined to Nigeria; they are in the public domain and are being monitored by people across the world.”
Dankwambo urged the affected institutions to produce all relevant records and resolve discrepancies in the interest of the country.
He said, “Therefore, if there are records or issues that need to be clarified and properly put in order, we should do so in the interest of our country. All of us have no other country except Nigeria.”