The Federal Ministry of Finance on Thursday explained why it could not immediately respond to audit queries involving billions of dollars contained in the 2021–2023 Oil and Gas Sector Audit Report published by the Nigeria Extractive Industries Transparency Initiative (NEITI). Appearing before the Senate Committee on Public Accounts, which is probing the report, the Permanent Secretary of the Ministry of Finance, Mr Raymond Omachi, accused the Nigerian National Petroleum Company Limited (NNPCL) and the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) of withholding vital financial records needed to respond to the queries. The NEITI report highlighted several financial discrepancies that the ministry has been unable to clarify due to what it described as a lack of cooperation from relevant oil sector agencies. One of the issues concerns a $3 billion pre-export financing loan obtained in 2012 to settle fuel subsidy payments. NEITI said the recovery of the loan through monthly Federation revenue proceeds remained unaccounted for under the pre-export financing and Project Eagle agreements. The report also revealed that in 2021, the Nigeria Liquefied Natural Gas (NLNG) paid $722.6 million in dividends and interest to NNPCL on behalf of the Federation. The funds, however, were neither remitted to the Federation Account nor properly accounted for. The report further raised questions over the spending of more than N200 billion on the country’s refineries in 2021, despite none of them being operational at the time. Omachi said the Finance Ministry was not directly involved in the day-to-day transactions and that NNPCL and NUPRC had failed to provide the necessary records. “We don’t have direct involvement in all the issues raised. The required provision of financial records from the affected agencies, particularly NNPCL and NUPRC, is not there,” he said. He said the ministry had engaged an external audit firm to conduct a forensic audit of the transactions to facilitate reconciliation. Omachi urged the Senate to use its statutory powers to compel the heads of NNPCL and NUPRC to appear before the committee alongside the Finance Ministry. Responding, the Chairman of the committee, Senator Ibrahim Hassan Dankwambo (Gombe North), directed the ministry to organise a joint reconciliation session with NNPCL, NUPRC and other relevant agencies. Dankwambo said the discrepancies had international implications for Nigeria’s economic reputation.
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