The Nigerian National Petroleum Corporation inquiries (2)

By Patrick Dele Cole   |   22 September 2015   |   3:08 am  

NNPC-RefineryContinued from yesterday

IT will seem impossible to collaborate the Production Figures. With the present agreements, there are no built-in methods for collaborating production figures either at the NNPC or at the ministry of Finance or any where else. The only way would be to check the Inspectorate Department’s figures with independent production figures kept by the producing companies. The tribunal was not aware that this was done even though the Inspectorate Department’s figures were used for computation of Royalties payable to the Government by these companies.

The Tribunal concluded that there was absence of any independent self-controlling system for agreeing Crude Oil production at the NNPC or the Federal Ministry of Finance.

For a sensitive organisation like the NNPC, the Tribunal was of the view that holding board meetings once in an each quarter is inadequate.

With regard to Crude Oil Joint Venture Accounts, the NNPC should as a matter of urgency, develop a uniform format for collecting information from all operators producing Crude Oil with which it is associated. Such uniform information will facilitate comparison between the various operators’ returns. In additions, it should establish standard accounting policies which will guide the treatment of specific items (assets and other expenditures) in the returns and expenditure budgets prepared by the Operators. The NNPC should also consider a Joint Venture Accounts Inspectorate or Internal Audit Unit which will be solely responsible for checking on a regular basis all the records and activities of the Joint Venture Operators.

The Accounts Department should perform a controlling function over the activities of the Crude Marketing Unit in the Commercial Department with regard to invoicing for crude oil sales. Such control function will be performed when the accounts department receives independently all the information regarding the shipment of oil from the nomination of vessel upwards. It should in the process of checking receipts into account No. 3096 in the Central Bank confirm customers who have been invoiced and those who have not. If such form of control existed, the omission of the four liftings by Pan Ocean would have been picked up in good time and not after the Company had written to request for invoices nearly 10 months after the first lifting.

The Tribunal, therefore, recommends that Inspectorate Division, in consultation with representatives of the Federal Ministry of Finance and the NNPC should design statements which should account for the last drop of crude oil raised from Nigerian soil. This means that the differences between any of the figures should be easy of explanation. In fact the Tribunal felt that because of the rather very important role that the oil industry plays today in the lives of Nigerians generally, the figures for total productions by each operator and the share of NNPC together with the export sales figures of the NNPC for every quarter should be released at the end of each quarter for publication in the Federal and State Gazettes and all the news media. It should be treated like the Foreign Exchange rates published weekly by the Central Bank or the Stock Exchange listings published by the Nigerian Stock Exchange.

Please, forgive that I have quoted large portion of the report. I have given this report to several knowledgeable people about NNPC who concluded that it reflects their view of what NNPC is today in 2015.

In reality this is a report on NNPC in 1980. There is little change in the concepts and appraisals of NNPC for the past 35 years.

• Concluded

• Ambassador (Dr.) Patrick Dele Cole (OFR) is a Consultant to The Guardian Editorial Board.



You may also like