The Federal Ministry of Finance has blamed the Nigerian National Petroleum Company Limited (NNPCL) for its inability to provide satisfactory answers to queries raised in the 2021–2023 Oil and Gas Sector Audit Report by the Nigeria Extractive Industries Transparency Initiative (NEITI).
The ministry said it could not provide some of the financial records required to address the queries because the documents were held by relevant agencies, particularly NNPCL.
The Permanent Secretary of the Ministry of Finance, Raymond Omachi, stated this on Thursday when he appeared before the Senate Committee on Public Accounts to respond to financial infractions contained in the NEITI audit report.
One of the major issues raised by NEITI concerns a **$3 billion pre-export financing loan** obtained in 2012 to settle subsidy payments to petroleum product marketers.
According to NEITI, the circumstances surrounding the loan and its recovery from monthly Federation revenues under the Pre-Export Financing and Project Eagle agreements remain unclear.
The audit also questioned the handling of **$722.6 million in dividends and interest paid by Nigeria Liquefied Natural Gas (NLNG) to NNPC in 2021 on behalf of the Federation**.
NEITI said the funds were neither remitted to the Federation nor properly accounted for.
Another issue concerns an NLNG financing agreement entered into by NNPC in 2019 on behalf of NPDC to provide incremental gas supplies to NLNG. Under the agreement, NLNG was to provide advance cash-call payments for selected projects.
The agreed financing amount was **$2.469 billion**, with a 12-year duration.
The audit report also noted that none of Nigeria’s refineries was operational in 2021, despite about **₦200 billion reportedly spent on the facilities**.
The ministry was further unable to provide answers concerning **$221.283 million in overhead costs incurred by the Nigerian Petroleum Investment Management Services (NAPIMS) in 2021**.
NEITI also questioned cash-call payments made by NAPIMS to Newcross after the Federation’s interest in the relevant assets had reportedly been transferred to NPDC in 2019.
According to the audit, NAPIMS made cash-call payments of **₦11.47 billion and $29.218 million** in 2021 in respect of the transferred assets. It also identified cash-call receivables of **₦287.55 billion and ₦42.14 billion** involving NPDC’s interests in NDC/NAOC and Newcross.
Responding to the Senate committee, Omachi said the Ministry of Finance was not directly involved in all the transactions questioned by NEITI and therefore depended on the affected agencies to provide the relevant records.
> “We don’t have direct involvement in all the issues raised and required provision of financial records from the affected agencies, particularly NNPCL, NUPRC etc, is not there,” he said.
Omachi disclosed that the ministry had engaged **Arthur Andersen LLP** to conduct a forensic audit of the transactions and reconcile the accounts.
He, however, urged the committee to invite NNPCL, the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) and other relevant agencies to appear alongside the Ministry of Finance.
According to him, the ministry had experienced difficulties obtaining the records needed to resolve the outstanding queries.
The NNPCL and NUPRC were not present at the hearing.
The committee chairman, Senator Ibrahim Hassan Dankwambo, subsequently directed the Permanent Secretary to arrange a joint meeting involving the Ministry of Finance, NNPCL, NUPRC and any other relevant agency.
Dankwambo also questioned when the forensic audit by Arthur Andersen LLP would be completed, noting that its timeline had already been extended twice, from six months to one year.
He stressed the need for urgent clarification of the issues, noting that the matters were being monitored internationally and remained in the public domain.
The Senate committee’s intervention is expected to bring the agencies holding the relevant records before lawmakers to explain the transactions and help resolve the outstanding queries raised by NEITI.