A new report by the office of the auditor general of the federation has indicted the Nigerian National Petroleum Company Limited (NNPCL) for questionable expenditures amounting to about ₦684 million on abandoned projects and irregular procurements.
The revelations are contained in the Auditor-General’s 2022 annual report an 808-page document recently submitted to the national assembly in line with constitutional requirements.
The audit outlines serious weaknesses within NNPCL’s financial management systems, highlighting opaque transactions, weak internal controls, and potential diversion of public funds by the state owned oil company.
According to the report, the company made several payments without evidence of project execution, irregularly renewed contracts, and failed to comply with financial regulations established to protect public resources.
In a number of cases, auditors found no proof of work done despite contractors receiving full payment.
The report further states that the payments breached Financial Regulations (FR) 3104 and 3106 (2009), which mandate the recovery of mobilisation fees from non-performing contractors and their referral to the Economic and Financial Crimes Commission (EFCC).
The regulations also impose sanctions where contractors present false certificates of completion.
One of the most severe infractions involves a ₦533 million contract awarded in May 2020 for the construction of an Accident and Emergency Facility along Airport Road, Abuja.
Although ₦292 million covering the first three project milestones was released by September 2020, auditors visiting the site in December 2022 found it abandoned.
None of the planned components, including medical wards, a mortuary, physiotherapy unit, or external works, had been executed.
Auditors blamed the failure on ineffective internal controls and warned that such lapses expose government funds to significant risk.
NNPCL responded by requesting the SAP payment number for verification, but auditors dismissed the response as inadequate.
They directed the Group Chief Executive Officer (GCEO) to recover and remit the ₦292 million to the treasury and provide evidence to the National Assembly’s Public Accounts Committees (PAC).
The GCEO at the time was Mele Kyari, who has since been replaced by Bayo Ojulari.
Another flagged contract involved ₦246 million paid for the supply of 2,400 metres of carbon steel pipes to the Warri refinery and petrochemical company.
Despite full payment, only 1,908 metres had been delivered by the time of the audit.
The company attributed the delays to COVID-19-related supply disruptions, but auditors deemed the justification unsatisfactory.
A separate ₦152 million payment reportedly made at the request of the Inspector-General of Police (IGP) was also flagged.
Auditors found no supporting documents detailing the procurement or its completion, describing the transaction as irregular and in violation of a 2008 Establishment Circular that bars MDAs from soliciting or accepting financial support from subordinate agencies.
Overall, the auditor general concluded that NNPCL’s weak internal control environment has led to possible financial losses, unexecuted contracts, and diversion of public funds.
The report calls for urgent reforms to ensure compliance with financial regulations and safeguard national resources.
In recent years, NNPCL has been widely criticised for a lack of transparency, having failed to publish audited accounts for 43 years until 2020.
Meanwhile, the EFCC is currently investigating 14 NNPCL officials including two former CEOs, Mele Kyari and Abubakar Yar’Adua over an alleged $2.7 billion refinery rehabilitation scandal.
The senate committee on public accounts is also probing an alleged ₦210 trillion discrepancy in the company’s audited financial statements between 2017 and 2023.
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