…Panel seeks answers on $3bn contract agreement, $722m LNG dividends, others

The Federal Ministry of Finance on Thursday accused the Nigerian National Petroleum Company Limited (NNPC Ltd) of withholding financial records required to respond to queries raised against it in the 2021–2023 Oil and Gas Sector Audit Report by the Nigeria Extractive Industries Transparency Initiative (NEITI).

The Permanent Secretary of the ministry, Mr Raymond Omachi, made the accusation while appearing before the Senate Public Accounts Committee (SPAC) to answer questions on several financial infractions raised against the ministry in the NEITI audit findings.

One of the infractions contained in the report relates to a $3bn 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.

Another query raised by NEITI states that “In 2021, the sum of $722.6 million was paid to NNPC by Nigeria Liquefied Natural Gas (NLNG) as dividend and interest earned by the Federation but was neither remitted to the Federation nor properly accounted for.”

The ministry also failed to provide answers to NEITI’s observation that none of the country’s refineries was operational in 2021 despite about N200bn reportedly spent on them.

Similarly, it could not provide an explanation for the $221.283m overhead costs incurred by the Nigerian National Petroleum Investment Management Services (NAPIMS) in 2021.

Responding to the queries, Omachi said the ministry was not directly involved in all the transactions and that the agencies concerned, particularly the NNPCL, had failed to cooperate by providing accurate records.

“We don’t have direct involvement in all the issues raised and required provision of financial records from the affected agencies, particularly NNPCL, NUPRC etc, is not there.

“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,” he said.

However, the committee, chaired by Senator Ibrahim Hassan Dankwambo (Gombe North), questioned the Permanent Secretary on when the report of the forensic audit would be ready, noting that the deadline had already been extended twice, from six months to one year.

Omachi, however, insisted that the NNPC Ltd and the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) should be invited to appear alongside the Ministry of Finance to address the issues.

He 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.

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“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.”

The committee chairman directed the Permanent Secretary to arrange the meeting with the affected agencies, stressing that the issues were being monitored not only in Nigeria but also internationally.

“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.

“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,” he said.