17.877m Barrels of Crude Oil Exported Without Records- Auditor General

By Newscurve

New facts have emerged of details of the unprecedented fraud in the nation's oil sector showing that  over 17.877 million barrels of crude oil were exported between 2016 and 2020 without proper documentation.

The quantity which is valued at $1,020,969,281.12 is contained in a report by the Auditor General of the Federation (AuGF) obtained by news men.

In the report, the Office of the Accountant-General of the Federation was indicted for making payments of over N73 billion to “service providers” (Pre-Shipment Agents (PIAs) and Monitoring and Evaluation Agents (MEAs)  for inspection and monitoring of oil and gas exports without budgetary appropriation.

The AuGF stated that the payments without budgetary appropriation were a violation of the provisions of Section 80(4) of the 1999 Constitution. 

The AuGF also faulted the NNPC (now Nigeria National Petroleum Company Limited (NNPCL)  for appointing two PIAs and one MEA in 2017 knowing fully well that President Muhammadu Buhari canceled the appointments of all service providers in 2015.

The report with reference number 747/99/CONF/VOL.ll/75 focused on pre-shipment inspection and monitoring of crude oil and gas exports by the Federal Ministry of Finance, Budget and National Planning. 

The report which was signed by the immediate past Auditor-General, Adolphus Aghughu, was submitted to the Clerk of  the National Assembly on  June 29, 2022.

In the preamble of the report, the AuGF  explained that guidelines for Oil and Gas Export 2017 required “any person intending to export oil and gas and other related product  from Nigeria shall, in the first instance, process the Nigeria Export Proceeds (NXP) Form and any other form so prescribed through an authorised dealer bank irrespective of the value and whether or not payment is involved.”

The report reads in part:  “Audit review of the annual reports of Pre-Shipment Agents (PIA) for the period revealed that some exporters of crude oil exported without completing the required NXP form as stipulated.

“This was further confirmed from an interview conducted with the Pre-Shipment inspection Agents (PIAs) in charge of the Oil and Gas Terminals. Auditor’s review of annual reports of PIAs revealed that the PIAs, on a monthly, quarterly, and annual basis, submitted their reports highlighting non-completion of NXP forms and the FOB value of such exports to the Central Bank of Nigeria (CBN), which is the head of NESS Secretariat and has the responsibility to monitor the repatriation of all export proceeds.

“However, auditors’ review of the Nigeria Export Supervision Scheme (NESS) annual report from 2016 to 2019 neither revealed such non-compliance by exporters nor corrective actions taken by the CBN to forestall reoccurrence.

“Information obtained from the PIAs revealed that during the audit period, a total of 17,877,705 barrels of crude oil valued at $1,020,969,281.12 (One billion, twenty million, nine hundred and sixty-nine thousand, two hundred and eighty-one dollars, twelve cents only) were exported without completion of the required NXP forms.

“It is evidence that crude oil and gas worth $1,020,969,281.12 were exported without completion of the required NXP Forms. This gives rise to either non-repatriation or delay in the repatriation of export proceeds.

“The Nigeria Export Proceeds form is a mandatory statutory document to be completed by all exporters for shipment of goods outside Nigeria. It contains details of the goods to be exported and facilitate tracking of export proceeds into the exporter’s domiciliary account in Nigeria.

“The situation continued as at the time of audit because DPR has not been sanctioning defaulters as provided by section 19(a) of the guidelines and inadequate monitoring by Trade and Exchange Department of Central Bank of Nigeria who has the mandate as stipulated in section 20(c) of the Export Guidelines to monitor Deposit Money Bank (OMB) of Exporters”.

While stating that the appointment of  the three service providers is a violation of Sections 44 and 12 (1) of the Public Procurement Act 2007, the AuGF said: “Audit review of NESS Annual report as compiled by the Technical Committee on Pre-Shipment Inspection for the audit period revealed that Nigeria National Petroleum Corporation (NNPC) default in the payment of NESS levy.

“The report of 2016 indicated that the corporation was indebted to the Scheme to the tune of N26,204,218,007 83 as of 30″ June 2015. The corporation indebtedness increased to N31,215,478,925.36 as reported in the 2017 NESS Annual report. While the 2018 report revealed that it dropped to N27,682,859,799 32. In the year 2019, it further dropped to N13,471,857,145.62.

“Although NESS Annual report for 2020, was not made available to the audit team, a review of NESS correspondence file maintained by FMoFB&NP, specifically a memo from CBN addressed to the  Minister of Finance, Budget and National Planning with Ref. Nos. TED/EXP/CON/NES/01/123 of 8″ March 2021, revealed that the corporation’s level of indebtedness increased to the tune of N419,289,911,020.56 being the reconciled value of its indebtedness to the scheme”.

“The Nigeria National Petroleum Cooperation (NNPC) has consistently defaulted in the payment of NESS levy due. As at the time of the audit, the corporation is owing the sum of N19,289,911,020.56. This is capable of affecting the effective implementation of Pre-Shipment Inspection and Monitoring if not promptly checked.

“The appointment of the three (3) service providers on the stop-gap arrangement is a violation of sections 44 and 12(1) of the Public Procurement Act, 2007, and the Pre-shipment Inspection of Export Act, 1996.’’