Re: SERAP Gives NNPCL 7-Day Ultimatum To Account For Missing $2.04 Billion, N164 Billion Oil Revenues

By Adewole Kehinde

“To oppose corruption in government is the highest obligation of patriotism.” G. Edward Griffin

My attention was drawn to SERAP’s threat to NNPC Limited by giving the company a 7-day ultimatum to account for missing $2.04 billion, or N164 billion, in oil revenues.

Even though SERAP has never won a case in court despite its threat to several government institutions, they are bound to fail again with its latest threat to NNPC Limited.

According to SERAP’s statement, citing the 2020 audited report by the Auditor General of the Federation (AGF), the Nigerian National Petroleum Corporation (NNPC) failed to remit over USD$2 billion and N164 billion in oil revenues to the federation account.

I am reproducing a 2016 statement from the NNPC signed by the former Group Executive Director/Chief Financial Officer (Finance & Accounts), Isiaka Abdulrazaq.


Ladies and Gentlemen of the press, the Auditor-General of the Federation (AuGF) declared to the National Assembly on the 14th of March 2016 that NNPC has failed to remit the sum of N3.235Trillion to the Federation Account for the period ended 31st December 2014.  NNPC wishes to state in strong terms that the AuGF’s declaration is erroneous.  It should also be noted that although this period is before the New NNPC Management was appointed in August 2015, the management still deem it fit and important to correct any misinformation about the activities of the Corporation as this will adversely affect its current and future financial and operational plans if not corrected.  Hence the need for this press release.

Since the new management was appointed it has placed great emphasis on transparency, accountability and integrity and has sought to refocus and reposition the Corporation as demonstrated by the 20 fixes initiatives some of which include the following:

The publication of NNPC monthly Financial and Operations Reports in all major newspapers as well as on its website.

Focus on cost reduction across board; this effort has yielded a drop in monthly operational losses from N30Billion in August 2015 to N3Billion in January 2016. 

Restructuring of NNPC which is focused on improving the performance and profitability of all NNPC operations.

The improvement in revenue remittances to the Federation Account.

Upon the appointment of the new NNPC management, it identified all legacy claims issues between NNPC and the Federation and engaged with the Federal Ministry of Finance (FMF) to resolve the issues by inviting the appointed forensic auditors to conclude the previous forensic audits on these claims and the final report on this is expected soon.

Ladies and Gentlemen of the press as you are well aware, it is not in NNPC’s character to join issues or trade blames with other agencies of government but, considering the high level publicity generated by the purported declaration by the AuGF to the National Assembly that NNPC has failed to remit the sum of N3.235Trillion and the erroneous impression it has created among Nigerians and international financial community, it has become imperative to set the records straight.

The declaration by the AuGF may have been borne out of misunderstanding of how revenues from crude oil and gas sales are remitted into the Federation Account. The following explanation clarifies the process and lays out the facts behind the figures to correct any ambiguities associated with this issue.

As part of its responsibilities, NNPC is allocated 445,000 barrels per day for processing into petroleum products for distribution to the nation.  Any unprocessed crude is sold and the proceeds used to pay for importation of petroleum products.  The proceeds from the sale of these products are remitted to the federation account after deducting the cost associated with the supply and distribution. 

These costs include: 

Subsidy on Petroleum Products

As a major supplier of petroleum products to the nation, NNPC is entitled to claims on subsidy from Petroleum Products sold at government regulated price (whether imported or locally refined).  The process and determination of appropriate subsidy claim is managed by PPPRA who ultimately issues certificates, which is netted out of domestic crude cost.  The total amount of subsidy that have been approved and certified by PPPRA for the period of January 2012 to December 2014 was N2.34trillion.  An additional N7.96Billion subsidy claim is still under reconciliation.

Crude Oil & Petroleum Product Losses

Losses from crude oil and petroleum products as a result of vandalism on its network of pipelines for the period of January 2012 to December 2014 were N202.68Billion.

Petroleum Product Strategic Holding Cost and Pipeline Repairs and Maintenance Cost for the period of January 2012 to December 2014 amounted to N358.88Billion.

Consequently, the figure owed to the Federation Account as at January 2015 Federation Account Allocation Committee (FAAC) meeting report was N326,142,137,205.79 (which is still being reconciled) as shown on the table below and not the N3.23Trillion alleged by the AuGF.

Note:  This report does not include NNPC’s claim, as at 2009, of N1,374,856,321,401.00 against the Federation.

All the stakeholders in FAAC meeting are familiar with the N326.14Billion and it is already in public domain since then to date. As regard to the N1.374Trillion claims against the Federation, this is currently being re-viewed by FMF appointed Forensic Auditors at the instance of the Honourable Minister of Finance.

It is clear that the AuGF failed to reflect all the figures as they should be, not minding the fact that there is a clear process in conducting FAAC meetings where all Federation revenues are presented, discussed and approved. There are series of meetings before and after FAAC meetings to reconcile and resolve any issue as the need may arise.

The $235Million Allegedly Transferred To Undisclosed Escrow Account.

With respect to the $235Million proceeds from sale of Natural Gas allegedly transferred to some undisclosed escrow account, it should be noted that NNPC does not have any secret Escrow Accounts.

The fact is that the alleged $235Million represent proceeds from the sale of gas feedstock to Nigerian Liquefied Natural Gas Limited (NLNG) that was used to repay part of the Modified Carry Agreement (MCA) loans, applicable royalty to DPR and tax to FIRS.  The MCA loan was contracted specifically to fund the development of upstream oil and gas projects whose transactions are regularly reported to FAAC as part of the reconciliation of the revenues to NNPC, FIRS and DPR.  The MCA and all other alternative funding arrangements are annually appropriated by the National Assembly and are therefore fully disclosed to FAAC on monthly basis.

The best practice and established due process is that after any audit there should be an exit meeting between the auditor and the auditee where any outstanding issues are finally discussed and explained before the issuance of the audit report. There was no such meeting and NNPC did not receive any draft report from the AuGF’s office for comments.

Ladies and Gentlemen of the Press, NNPC wishes to state that in carrying out its statutory duties it will continue to maintain the highest level of transparency and accountability. Please be assured that NNPC remains available at all times to provide clarifications on these issues or any other matter relating to our responsibility to the Federation and the Nigerian people. 



Group Executive Director/Chief Financial Officer (Finance & Accounts)

Nigerian National Petroleum Corporation

NNPC Towers, Abuja.

 16th March 2016

There is no denying that the NNPC is the company that is being scrutinized the most by watchers of events in Nigeria’s oil sector. Since the Justice Ayo Irikefe Panel of Inquiry was established forty years ago in 1979 to investigate the alleged missing N2.8 billion in oil money, the NNPC has been the subject of numerous audits and investigations, including the ones conducted by the Senate and PwC previously mentioned, and has never been found to have committed a crime.

A degree of transparency in the NNPC’s operations not seen since the company’s founding more than 45 years ago would have been apparent to SERAP had they closely monitored events over the last five years under Kyari’s leadership.

Kyari unveiled his “roadmap to excellence,” which was centred around the TAPE agenda, as one of his first official acts. Transparency, accountability, and excellence in performance are the core values of TAPE. This has continued to be the cornerstone of his NNPC leadership style and has supported the accomplishments he has achieved over the past five years.

The adoption of international best practices by the NNPC has resulted in a revolution in administrative and technical procedures, which is one of the main achievements of the TAPE programme. It was therefore not shocking when, in September 2021, Kyari gave Nigerians an audited report on the NNPC’s 2020 finances for the first time in 44 years. The cherry on top was that the corporation reported a N287 billion profit, ending decades of deficits for the company.

In addition to managing the business according to sound, widely accepted management concepts, Kyari has elevated the NNPC to the status of one of the top oil firms in the world. Furthermore, he has addressed major issues facing the Nigerian economy by using his role as the company’s leader. Among these is the complex issue of crude oil theft, which has posed problems for Nigeria’s governments ever since the nation’s restoration to representative democracy in 1999. It is known that the “Crude Theft Monitoring Application,” created by the NNPC under Kyari’s direction, includes choices for reporting occurrences and receiving fast follow-up and responses, as well as another for validating crude sales paperwork.

Prior to the launch of the application, Kyari had taken leading officials of the Nigerian government in the Muhammadu Buhari administration including the then Minister of Petroleum Resources, Timipre Sylva; then Chief of Defence Staff of the Nigerian military, Gen. Lucky Irabor; and the Chief Executive Officer of the Nigerian Upstream Regulatory Commission, Mr. Gbenga Komolafe, to the Niger Delta creeks to tackle the menace of oil theft. His effort paid off as a four-kilometre illegal oil connection line from the Forcados Terminal into the sea, where for nine years criminals had been syphoning Nigeria’s oil, was discovered.

The accomplishment of this goal proved crucial because, according to NNPC Q4 figures, the nation’s oil production level increased to 1.6 million barrels from the previous figure of 1.2 million. This helped Nigeria reclaim its title as Africa’s largest producer, surpassing Angola (1.088 mb/d) and Algeria (1.021 mb/d).

Along with these achievements, the NNPC also managed to settle a long-standing disagreement with its business associates, particularly foreign oil firms. The Kyari-led NNPC signed various production-sharing contracts and other agreements, including Dispute Settlement Agreements and Escrow Agreements, that would produce approximately 10 billion barrels of crude and over $500 billion in revenue, as part of its determination to increase the nation’s production of crude and unlock investments in the deepwater space.

Additionally, by implementing the alternative funding model in place of the previous cash call payment system, the NNPC has been able to pay Nigeria’s joint cash call arrears to the IOCs to the tune of $5 billion. In addition, the Nigeria-Morocco Gas Pipeline project, which spans 5,600 kilometres and passes through these nations as well as seven more—Togo, Benin, Liberia, Cote d’Ivoire, Mauritania, and Senegal—has resulted in Memoranda of Association being signed by the NNPC Ltd. with nations such as Ghana, Gambia, Guinea, and Guinea-Bissau. When the project is finished, it will provide Morocco and Europe with around 3 billion standard cubic feet of gas per day (3 bscf/d) from Nigeria.

Also in 2022, NNPC Ltd. secured a $1.4 billion external project finance agreement for hydrocarbon projects in the Niger Delta.

Undoubtedly, Kyari’s implementation of the TAPE strategy at the NNPC provided the NNPC with a clear roadmap that enabled them to achieve these successes. No organisation, no matter how eager it is for a partnership, would logically want to conduct business with an opaque organisation of the type Sanusi describes. The arrival of the Kyari-led management has laid that old NNPC to rest. It has been replaced by a company that is committed to setting the benchmark for high-quality service delivery globally and outperforming both domestic and foreign rivals.

Kyari recently clarified that NNPC Ltd. was not hoarding any public monies and that the amount that NEITI recorded as non-remittance was really what the company owed the Federal Government in exchange for taking on the fuel subsidy burden.

It was discovered that the balance of unremitted oil revenue was the amount spent by NNPC Ltd. on its operations by the then-extant law, the NNPC Act.

Even the reputable auditing firm PricewaterhouseCoopers cleared the NNPC of misappropriation of funds. (

It’s unclear to me why SERAP keeps making these claims that, upon careful examination and inquiry by internationally reputable organisations, have been demonstrated to be unfounded. The accusations contradict the positive changes that the company has just undergone.


Adewole Kehinde is the publisher of Swift Reporters and can be reached at 08166240846. E-mail: