An audit report has found that the Federal Government owes the NNPC for improper, informal loans used to cover a range of expenses, from a presidential helicopter to maritime security, Reuters news agency reported yesterday. The audit, prepared by an outside organisation given access to accounts of the Nigerian National Petroleum Corporation as part of a government effort to improve transparency at the firm, raises doubts over its independence.
Revenue collected by the NNPC from oil production is meant to be passed to the Federation Account for distribution to the three tiers of government, but industry experts say powerful interests tap money before it is sent through official channels.
According to sources involved in the external audit, it will show outstanding debts in billions owed to the oil company by a number of ministries and state agencies.
The company paid for a N2.24 billion presidential helicopter, and is owed nearly N17 billion by the Power Holding Company of Nigeria and about N20 billion by the Nigerian Maritime Administration and Safety Agency (NIMASA).
State governors last week threatened to take the Federal Government to court over illegal tapping of oil revenues that should be shared among the three tiers.
The Finance Ministry and NNPC declined to comment to Reuters on the debts and the presidency and oil ministry did not respond to requests for reaction.
When Daily Trust contacted spokesperson for the NNPC, Mr Fidel Pepple, he said he would not comment on a report that he had not seen.
But Reuters quoted an unnamed source at NNPC as saying: "We are aware of many of these debts, obviously it isn't an ideal situation."
Government agencies in debt to NNPC should be funded through the budget, so such loans add to transparency concerns.
The NNPC needs its own funds to pay for joint ventures with foreign oil companies, some of which have lain dormant due to a lack of state investment.
"It does highlight the extent to which NNPC has been drawn into the more opaque areas of government - and will give ammunition to those critics who say it has operated at least partly as a slush fund for government," Antony Goldman, Nigeria oil expert at PM Consulting said.
"It points to the huge difficulties in making independent a corporation with such a complex web of assets and liabilities, at least some of which appear not to have been contracted solely on a commercial basis."
Numerous earlier reports and audits have concluded that corruption has been rife within NNPC. Last year, Transparency International and Revenue Watch ranked NNPC as one of the least transparent oil companies in the world.
The House of Representatives petrol subsidy probe report in April uncovered a N1 trillion fraud in the scheme, which is partly run by NNPC.
That report said NNPC was accountable to no one. It said the company owed oil traders, including privately-held Trafigura, $3.5 billion in unpaid bills.
A long-awaited Petroleum Industry Bill (PIB), due to go to the National Assembly for debate soon, is supposed to spin off some assets and replace the NNPC with a new, independent and partially listed National Oil Company (NOC). A copy of the PIB seen by Reuters is thin on detail, however.
The draft PIB also states that the oil minister will oversee all institutions within the industry, raising question marks over how independent the NOC would be.
President Goodluck Jonathan replaced the managing director of the NNPC and three other senior directors last month in efforts he said were meant to improve transparency and accountability.
He also fired the corporation's board and named a new one yesterday, but retained Petroleum Minister Diezani Alison-Madueke as chairman.
Daily Trust