By George Ozalla
The Federal Ministry of Finance and the Nigerian National Petroleum Company Limited (NNPCL) came under intense scrutiny at the National Assembly on Thursday over unresolved financial queries arising from the Nigeria Extractive Industries Transparency Initiative (NEITI) 2021 to 2023 Oil and Gas Sector Audit Report.
The confrontation occurred before the Senate Committee on Public Accounts, where the Permanent Secretary, Federal Ministry of Finance, Raymond Omachi, was questioned over several transactions involving the petroleum sector, including a $3 billion pre-export financing loan, $722.6 million in Nigeria Liquefied Natural Gas (NLNG) dividends and interest, refinery rehabilitation expenditure and overhead costs attributed to the National Petroleum Investment Management Services (NAPIMS).
One of the major issues before the committee was a $3 billion pre-export financing facility obtained in 2012 to settle subsidy payments. NEITI had raised questions over how the loan was recovered from monthly Federation Account revenue proceeds under the pre-export financing and Project Eagle agreements.
The audit also questioned the handling of $722.6 million paid by NLNG to NNPC in 2021 as dividends and interest belonging to the Federation. According to the audit findings, the money was not remitted to the Federation Account or properly accounted for.
The committee further examined the expenditure of about N200 billion on refinery rehabilitation in 2021, a period when none of Nigeria’s refineries was operational. Questions were also raised over $221.283 million in overhead expenditure incurred by NAPIMS during the same year.
Responding to the queries, Omachi said the Ministry of Finance could not provide direct explanations for transactions handled by agencies within the petroleum sector, particularly NNPCL and the Nigerian Upstream Petroleum Regulatory Commission (NUPRC).
He told the committee that the affected agencies had not supplied the ministry with the financial records required to reconcile the figures and resolve the issues raised by NEITI.
Omachi said the ministry had engaged Arthur Andersen LLP to conduct a forensic audit of the disputed transactions and reconcile the figures.
The explanation, however, did not satisfy the committee, particularly as the deadline for the forensic audit had already been extended twice, from six months to one year.
The permanent secretary subsequently urged the committee to invite NNPCL, NUPRC and other affected agencies to appear alongside the Ministry of Finance so that the disputed transactions could be addressed directly.
He appealed to the committee to use its constitutional powers to compel the agencies to appear, saying the ministry was prepared to sit with them before the lawmakers to resolve the outstanding issues.
The chairman of the committee, Senator Ibrahim Dankwambo, directed the Ministry of Finance to facilitate a joint meeting involving the ministry, NNPCL, NUPRC and other relevant agencies.
Dankwambo said the committee would not allow the unresolved financial queries to remain unattended, noting that the issues had implications beyond Nigeria because the country’s management of extractive-sector revenues was being monitored internationally.
He directed the affected institutions to produce the necessary records and clarify the discrepancies identified in the NEITI audit.
The development has once again drawn attention to the longstanding questions surrounding the management, accounting and remittance of petroleum revenues to the Federation Account, with the Senate committee insisting that the agencies involved must provide documentary evidence to support their positions.
The committee is expected to follow up on the reconciliation process and the forensic audit as part of efforts to establish the facts behind the disputed transactions and determine where responsibility lies.
