AGF accuses NNPC of not remitting N19bn gas sales proceeds to Federation Account

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Shell Oil spill in the Delta region of Nigeria. The local tribe, the Ijaw, complain of loosing their fishing as a result as well as having their water source poisoned. They also recieve no compensation from Shell's poor pipeline maintenance.

The Office of the Auditor General of the Federation (OAUGF) has accused the Nigerian National Petroleum Corporation, NNPC, of failing to remit $100.64 million gas sales proceeds, about N19.826 billion, to the Federation Account.

The OAuGF in its Audit Report for 2015, said a review of the Revenue and Account Receipts reports showed that Gas Sales proceeds due to the Federation Account in respect of feedstocks to Nigeria Liquefied Natural Gas (NLNG) were not paid in full.

The report noted that the difference was transferred and paid into designated Modified Carrying Agreement (MCA) Escrow Account and Niger Delta Petroleum Resources (NDPR) Escrow Account.

It further stated that the relevant documents relating to the operation of these accounts like cash books, bank statements, mandates, payment voucher details, among others, were not made available for audit examination.

It said, “The total amount transferred for the period of January to December 2015 was $100,640,203.49 made up of $94.073 million and $6.567 million for MCA Escrow and NDPR Accounts respectively.

To this end, the OAuGF has directed the Group Managing Director of the NNPC, to provide an explanation on the purpose for the creation of these Escrow accounts and the benefits to the 3 tiers of governments of the Federation to whom the Federation account belong.

It also ordered the NNPC to provide the cash books, mandates, bank statements and payment vouchers and any other relevant documents for the operation of the two Escrow accounts for the period under review.

The Office of the Auditor General of the Federation (OAUGF) further stated that during the examination of NNPC gas sales records presented by the Crude oil and Marketing Department (COMD), it observed that some customers who lifted gas paid less than the sales value due for the gas lifted.

The report listed the companies as Remington International Resources Limited, Mangrove Petroleum Supplies and Logistics Limited, Emadeb Energy Services Limited, Aredia Energy Resources Limited, Ultimate Gas Limited, Medalist Oil, and Gas Company, Mezcor Limited, and NIPCO.

It noted that details were not provided in the Revenue and Account Receipts report to explain reasons for non-payment of the amount or when the balance due was/would be paid.

It said, “It, therefore, became difficult to confirm whether these balances were received and paid into the Federation Account. However, a further inquiry from COMD revealed that these amounts were paid through the Nigerian Gas Limited (NGL) Sales & Distribution Account at specified dates, but this account was not accessible to the audit team.”

Furthermore, the report disclosed that a total of $30.964 million, about N6.099 billion due to the Federation Account in respect of sales of gas were not remitted but instead stated to have been paid through NGL Funding account.

The report said the purpose of this account was not made known to audit, likewise, the benefit of the operation of the account to the Federation.

It noted that evidence of the utilization of this amount totaling $30.964 million in the NGL Funding Account to the Federation could not be ascertained and confirmed as no documents such as the cashbook, bank statements, and mandates in respect of the account was presented for audit examination.

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