₦61 Billion Audit Shock: How NNPCL’s Books Unravelled

By ESTHER McWILLIS-IKHIDE

A fresh audit of the Nigerian National Petroleum Company Limited (NNPCL) has exposed a sprawling web of financial irregularities running into more than ₦61 billion, raising new questions about transparency and accountability at Africa’s largest state-run oil company.

The findings, contained in the 2022 Annual Report on Non-Compliance by the Office of the Auditor-General for the Federation (OAuGF), detail 28 financial breaches linked to NNPCL’s operations in 2021. The red flags range from undocumented payments and procurement violations to irregular contract extensions, abandoned projects, and massive lapses in internal control.

The Auditor-General warned that the violations “expose public funds to avoidable risk” and insisted that recovery and sanctions must follow.

A Pattern Years in the Making

The latest revelations deepen an already troubling history. Auditor-General reports between 2017 and 2021 had flagged more than ₦2.68 trillion and $19.77 million in unremitted funds, unsupported withdrawals, and diversions linked to NNPCL. The 2021 audit alone raised concerns over ₦514 billion.

The 2022 report suggests the trend has not only persisted but expanded across the company’s foreign offices, domestic operations, and procurement processes.

The London Office Controversy

One of the most striking issues involves the NNPCL London Office, where auditors found that £14.32 million was spent in 2021 without a single supporting document.

The office reportedly incurred personnel costs, fixed contract expenses, and other operational spending totalling the same amount—yet auditors said they were denied access to records confirming how the funds were used.

NNPCL management claimed all documentation exists and that the audit query did not specify which items were in question. But auditors dismissed the explanation, insisting that the funds must be fully accounted for and recommending that the company’s CEO be summoned before the National Assembly.

Irregular Payments Across Currencies

The audit uncovered questionable payments across four major currencies—naira, dollars, pounds, and euros:

Dollar Transactions: $51.6 million flagged

• $22.84 million unverified in Direct Sales Direct Payment settlements.

• $12.44 million tied to delays in acquiring generators at Mosimi depot.

• $1.80 million paid under an irregular vessel-charter extension.

• Additional millions paid without invoices, proper engagement, or statutory deductions.

Euro Transactions: €5.17 million

A contractor was paid €5.16 million with no trace of the engagement that justified the payment.

Naira Infractions: ₦30.1 billion

Major findings include:

• ₦12.72 billion unremitted to the General Reserve Fund.

• ₦3.45 billion paid without approval.

• ₦2.37 billion irregularly paid to staff as car-status cash options.

• ₦1.21 billion paid without interim certificates or invoices.

• ₦474 million moved via unauthorised virements.

• ₦292.6 million sunk into an abandoned Accident and Emergency hospital.

• ₦6.24 billion paid without supporting documents across various MDAs, with NNPCL contributing the largest chunk.

Auditors also flagged repeated failures to deduct VAT, Withholding Tax, Stamp Duty, and other statutory fees in several transactions.

Procurement Red Flags

The audit identified extensive abuse of procurement rules, including:

• $1.926 million in inflated costs due to unilateral substitution of a contracted vessel (MT Breeze Stavanger) with a more expensive one (MT Alizea).

• $8.23 million “emergency procurement” of custody-transfer meters without justification.

• Consultancy renewals done repeatedly without competitive bidding.

• Payments made for contracts with no evidence of execution.

The vessel substitution alone violated clear contractual terms and generated 30 months of unnecessary costs.

Civil Society Reacts

Anti-corruption groups say the findings confirm long-suspected institutional opacity.

The Centre for Anti-Corruption and Open Leadership (CACOL) described NNPCL as “the strongest cabal in Nigeria,” arguing that years of shielding and political protection have prevented meaningful scrutiny.

The Civil Society Legislative Advocacy Centre (CISLAC) blamed both NNPCL and political leaders, insisting that the President, National Assembly, and security agencies have failed to enforce accountability.

A Company in Transition—But Old Habits Persist

The audit comes at a critical time for NNPCL, which is attempting to reinvent itself as a fully commercial enterprise under the Petroleum Industry Act (PIA).

However, the report makes clear that the company still operates with the opacity and institutional weaknesses of its pre-PIA past.

The irregularities occurred under former Group Chief Executive Officer Mele Kyari, who was removed earlier this year and replaced by Bayo Ojulari.

What Happens Next?

The Auditor-General has directed:

• Full recovery of all unsupported payments.

• Remittance of withheld statutory surpluses.

• Sanctions against responsible officers in line with Financial Regulations.

• Appearance of NNPCL leadership before the Public Accounts Committees.

For a company central to Nigeria’s economy—and its reform agenda—the findings raise a stark question: Can NNPCL truly transform without confronting the systemic failures that continue to cost the nation billions?