KEY POINTS
- Audit finds N684 million paid out by NNPCL on abandoned projects and irregular contracts.
- Investigators say weak internal controls allowed payments without work done and breached financial rules.
- Report lands as NNPCL faces wider probes into refinery spending and trillions in unaccounted revenue.
Nigeria’s state oil company, NNPC, is again under pressure after a fresh audit by the Office of the Auditor-General of the Federation detailed more than N684 million in questionable payments, abandoned work and unexecuted contracts by the Nigerian National Petroleum Company Limited.
The findings, contained in the 808-page audit of the 2022 financial year and recently submitted to the National Assembly, point to recurring failures in oversight, documentation and internal control within one of the country’s most powerful institutions.
Auditors said the company breached several financial regulations, made payments for projects that never materialised and failed to recover mobilisation fees from contractors who had stopped work. They warned that the irregularities exposed the government to financial losses and opened the door to diversion of public funds.
The report revisits long-standing concerns about the opacity of the national oil firm, once notorious for going more than four decades without publishing audited accounts. Although the group was reorganised as a limited liability company in 2021, the audit suggests that old habits remain deeply entrenched.
Audit Flags Abandoned Facilities, Unexecuted Supplies and Missing Documentation
One of the most striking cases concerns a N533 million contract awarded in May 2020 to build an Accident and Emergency Centre along Airport Road in Abuja.
The project, jointly overseen at the time by the then NNPC and the State Security Service, was expected to take six months, yet auditors found that by September that year the company had already released N292 million covering the first three milestones.
When a team from the Auditor-General’s office visited the site in December 2022, they reported it was entirely deserted. None of the planned structures, from medical wards to the mortuary and physiotherapy unit, had been built. Under Nigeria’s financial rules, auditors said, contractors who fail to perform after receiving mobilisation fees should be compelled to refund the money in full and referred to the anti-corruption agency for possible prosecution.
NNPCL told auditors it needed the SAP payment reference to verify the disbursement, but the audit team rejected the explanation and said the findings stood until corrective action was taken.
The report calls on the Group Chief Executive Officer to recover the N292 million and remit it to the treasury, with evidence provided to the Public Accounts Committees of the National Assembly. The infractions occurred under former GCEO of the NNPC Mele Kyari, who was removed earlier this year and replaced by Bayo Ojulari.
A second case involved the Warri Refinery and Petrochemical Company, where N246 million was paid for 2,400 metres of seamless carbon steel pipes. By late 2022, only 1,908 metres had been supplied. The remaining 492 metres were outstanding, even though the contractor had been fully paid.
The company attributed the delays to global supply chain disruptions during the pandemic and provided a Goods Receipt Note dated October 2020 as evidence of delivery. Auditors dismissed this and said it did not justify full payment. They directed the GCEO to recover the amount and explain the expenditure to lawmakers, warning that sanctions specified in the Financial Regulations would apply if recovery failed.
A separate payment of N152 million also came under scrutiny. The money, auditors said, was released to a contractor for an unspecified procurement claimed to have been requested by the Office of the Inspector-General of Police. Auditors said neither completion certificates nor procurement details were presented. They added that the transaction breached a 2008 Establishment Circular that bars ministries and agencies from soliciting or receiving financial support from parastatals under their supervision.
Across all three cases, the Auditor-General said weak internal controls at NNPCL allowed irregular transactions to pass without scrutiny, creating risks of payments for work not done and possible diversion of public resources. The report urged swift remedial action and adherence to financial rules to protect public funds.
The audit arrives at a time when NNPCL is already grappling with significant controversies. The Economic and Financial Crimes Commission is probing 14 officials, including two former chief executives, over an alleged 2.7 billion dollar fraud tied to the rehabilitation of the decrepit Kaduna, Warri and Port Harcourt refineries. The Senate Committee on Public Accounts is also examining claims that about N210 trillion was unaccounted for in audited statements between 2017 and 2023, with executives appearing before the committee only after repeated summons.
Previous audits, including that of 2021, similarly flagged unauthorised deductions and diversions running into hundreds of billions of naira. An editorial published earlier this week by Premium Times urged the company to return missing funds, warning that no economy can sustain such pressure on its public finances.
