In June, the Senate Public Accounts Committee revealed what it called a “mind-boggling” financial discrepancy in the 2023 audited financial statement of the Nigerian National Petroleum Company Limited (NNPCL).
At the centre of this revelation: a combined ₦210 trillion — made up of ₦103 trillion in accrued expenses and ₦107 trillion in receivables — spanning a six-year period.
EDITOR’S PICKS
At another hearing investigating the discrepancy last Tuesday, committee chairman Senator Aliyu Wadada questioned the integrity of these entries, stating that they raise “fundamental questions about transparency and financial integrity.” He also flagged a ₦600 billion item for retention fees with no contract backing it, and several other undocumented legal and audit fees.
The gravity of the figures drew national attention and prompted the Senate to summon NNPCL’s top executives for an explanation.
The upper legislative chamber’s concerns have led to unsubstantiated claims on social media that ₦210 trillion was “stolen” from the NNPC account.
EKO HOT BLOG presents the facts in this explainer.
NNPC GCEO and CFO appear before Senate
In response to the Senate’s concerns, NNPCL’s Group Chief Executive Officer (GCEO), Bayo Ojulari, appeared before the committee on Tuesday.
The NNPCL GCEO requested more time to properly examine the issues raised, noting that he had only spent just over 100 days in office.
“I need more time to dig into the technicalities and perspectives of the issues. Your explanation has provided me with a new perspective on the issues,” he said.
“I will engage the external auditors and other relevant groups so we can reconcile the details and respond appropriately.”
Although Ojulari requested four weeks, the committee gave him three weeks to forward written responses to all 19 audit queries. The hearing came before speculations of his resignation.
During an earlier public hearing in June, the NNPC Chief Financial Officer (CFO), Adedapo Segun, explained the disputed figures.
Segun clarified that the ₦103 trillion classified as accrued expenses reflected outstanding Joint Venture (JV) cash calls — that is, amounts requested by international oil companies (such as Shell and Chevron) for funding operations, but which had not been reconciled. Likewise, the ₦107 trillion listed as receivables referred to funds owed to NNPCL, also largely relating to JV operations.
“The entries are essentially two sides of the same transaction,” he said. “Once governance procedures are completed, they typically cancel each other out.”
Understanding the accounting terms: Accruals and receivables
The term accrued expenses refers to costs that a company has incurred but not yet paid — in this case, what NNPCL owes. On the other hand, receivables are amounts that others owe to NNPCL for services rendered or shared costs. These are both standard accounting practices in large corporations, especially those managing multiple joint ventures and multinational partnerships.
So, is the money missing or stolen?
Not exactly, according to audit documents seen by EKO HOT BLOG. The figures reflect pending reconciliation, not cash that has disappeared from the books. However, the Senate’s worry stems from the scale, opacity, and age of the entries.
Why the Senate isn’t satisfied
While the explanations suggested the transactions are legitimate, the Senate insists that NNPCL’s financial process lacked basic governance procedures:
- No supporting documents were provided for large amounts such as ₦600 billion in retention fees.
- Legal and audit charges running into billions were also undocumented.
- The entries covered up to 15 years of transactions, making the audit appear incomplete.
- OPCOM, the internal operations committee tasked with validating JV transactions, had not approved the reconciliations before the audit was signed off.
Senator Ede Dafinone, a chartered accountant and committee member, warned that signing off on unreconciled figures gives the misleading impression that the audit was complete. He argued that such figures should have been flagged as “pending reconciliation” or moved to the post-balance sheet notes, which was not done.
What the audit firm said
The audit firm clarified that the 2023 statement was NNPCL’s first full-year corporate financial report following its restructuring into a commercial entity. In the past, joint venture financials were reported separately by NAPIMS, a subsidiary of the former NNPC. The restructuring meant these figures were now consolidated into the NNPCL’s main accounts.
The auditors admitted that reconciliation was pending but argued that this was a known issue and would be corrected in the 2024 statements. They also said the bulk of the figures may not even represent NNPCL’s full liability but merely its share in various joint operations.
So, is ₦210 trillion missing or stolen?
The short answer: No. There is no evidence — so far — that ₦210 trillion has vanished from NNPCL’s accounts or been stolen. The controversial figure is the sum total of two large, unreconciled financial categories — expenses and receivables — which should offset each other after proper validation.
However, the problem lies in:
- Publishing unreconciled data in an official audit,
- Failing to document or disclose the nature of certain transactions,
- And keeping some transactions on the books for more than a decade.
Until full reconciliations are provided, the Senate is treating the matter as potentially fraudulent and has given the NNPCL GCEO three weeks to provide a detailed breakdown. If the company fails to do so, the issue could be referred to anti-graft agencies.
Bottom line
What we’re seeing is not (yet) a theft scandal — it’s a transparency scandal. The Senate is demanding more than balance sheets; it wants clear documentation, governance validation, and credible explanations for the most consequential corporate accounts in Nigeria.
FURTHER READING
While NNPCL and its auditors insist the entries are explainable and reconcilable, their failure to follow financial best practices has triggered justified alarm and unless they respond satisfactorily, the consequences could escalate fast.
Philip Ibitoye is a Special Correspondent with EKO HOT BLOG. Click here to find daily analysis and critical insight on trending issues in Lagos and other parts of Nigeria.
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