Jonathan orders refining of NNPC accounts

Written by Daily Trust Saturday, 22 May 2010

ShareThe directive by President Goodluck Jonathan seeking a fresh audit of the Nigerian National Petroleum Corporation (NNPC) account has put smiles on many faces, with the hope that the hidden records will soon be revealed.

NNPC, as a government agent overseeing oil investments as well as handling the revenue generated from the sector, has been on the spotlight over the way and manner it is keeping such records.

Equally worrying is the fact that audit after audit, the Corporation’s records are always filled with errors, miscalculations and some missing funds. Both the 1999-2004 and the recent 2005 audits carried out by the Nigerian Extractive Industry Transparency Initiative (NEITI) there are series of contradictions in the records of the NNPC on the volume of oil produced and exported by the country in the past years.

A portion of the 2005 audit carried out by the Hart Group reported that “companies reported crude oil received into terminals amounted to 917.7 million barrels. Companies operating onshore did not provide information about gross field production. The audit could not, therefore, report on any losses occurring between wellhead and terminal.

“The CBN is said to be unable “to reconcile NNPC payments for domestic crude to its constituent elements,” be it crude consumed by local refineries or exported and ultimately paid for by the NNPC.

The audit is a good thing for the country, said Professor Adeola Adenikinju, Vice President, Nigerian Association for Energy Economics (NAEE).  “I believe the audit is a pointer to the long time misdeeds that happened in the NNPC, as long as the NNPC remains a public enterprise, it will be financed by Nigeria’s money and therefore, Nigerians have the right to know what is going on there.”

“We are talking about Billions of naira. It is important we have an audit of the accounts of the NNPC on a regular basis. The Hart Report commissioned by the NEITI, has recommended money for the NNPC to return to the Federation Account, so I think the audit is important and should be done by a credible organisation.”

George-Hill Anthony, National Chairman of the Coalition for Accountability and Transparency in Extractive Industry, Forestry and Fisheries in Nigeria (CATEIFEN), a civil society coalition, said conducting a fresh audit of the NNPC is a move in the right direction.

“Why people are even frustrated with the NNPC is that like the more you look, the less you see.  Remember, the NEITI conducted their audit and they concluded that the NNPC, they clearly come out to say that NNPC could not account for the barrels of crude oil they produce in a day and should be moved from manual audit to frantic audit.”

An Energy and Environmental Safety Consultant and former General Manager of the Nigeria Liquefied Natural Gas, Joe Odocha, said the audit cannot change anything in the operations of the Corporation.

An audit is to make sure that processes and procedures are followed, is not like to go and catch a thief, so auditing is a routine thing which should be done periodically.

“I don’t think is something different. Auditing is not a probe. The president realises that audit hasn’t been done for sometimes or have not been done professionally, he then requested an internationally recognised body to do.”

“Don’t interchange the two audits and probe, auditing is to check if the processes and procedures have been followed, but probe is when there is a problem to know who did this or who did that.”

At the tail end of his tenure, former Group Managing Director of the NNPC, Mohammed S. Barkindo said NNPC has nothing to hide. He said their account is very open and they are very current and they are submitted to all agencies of government including the auditor general of the Federation.

Barkindo said one of the major advantages of the Petroleum Industry Bill (PIB) is the level of transparency that had hitherto not been seen in this country.

“If you read the provisions on transparency and compare it to what we have today, you see that our account even under the current regime have often been passed to relevant government agencies and once the PIB is passed and the level of transparency elevated to one of the highest in the World,” Barkindo said.