By Obinna Uballa
The Office of the Auditor-General for the Federation has uncovered more than N61 billion in questionable transactions involving the Nigerian National Petroleum Company Limited (NNPCL), revealing a sweeping pattern of financial breaches, unverified expenditures and violations of federal regulations across the national oil company and its subsidiaries.
The concerning findings are contained in the Auditor-General’s 2022 Annual Report on Non-Compliance, which reviewed NNPCL’s 2021 financial activities.
The report, seen by the New Diplomat on Sunday, and which is now before the National Assembly, documents 28 major irregularities spanning foreign currency payments, procurement violations, unauthorised virements, abandoned projects, tax infractions and unremitted statutory surpluses.
According to the document, the flagged sums include N30.1bn, $51.6m, £14.3m and €5.17m, amounting to roughly N61.1bn when converted to naira. The Auditor-General warned that the breaches point to systemic weaknesses in financial controls, exposing public funds to “avoidable risks.”
One of the most striking revelations involves the NNPCL London Office, which reportedly spent £14.32m in 2021 without providing any supporting documents. Auditors said the funds were expended on personnel costs, fixed contract obligations and operational expenses, but vouchers, invoices and approvals were not presented. The report noted that this contravened multiple provisions of the Financial Regulations requiring full documentation for all public expenditures.
NNPCL management responded that the London Office operated within its approved annual budget and keeps detailed records, but the Auditor-General dismissed the explanation as insufficient, insisting the company must account fully for the spending. The report recommended that the Group Chief Executive Officer be summoned by the Public Accounts Committees and that the entire £14.32m be recovered and remitted to the Treasury if proper documentation is not produced.
Euro-denominated payments also raised concerns. Auditors flagged €5.17m paid to a contractor without any evidence of engagement, contract award or delivery of services. Dollar-linked transactions were equally problematic, including $22.84m in unsubstantiated Direct Sales Direct Payment settlements; $12.44m tied to a delayed generator procurement project; $1.80m paid under an irregular contract extension for a bunkering vessel; and several provisional payments without invoices. In total, the report marked $51.67m as irregular or unsupported.
Domestically, auditors documented N30.1bn in naira-based violations. These include the failure to remit N12.72bn into NNPCL’s General Reserve Fund, N3.45bn approved by the Chief Financial Officer without the Group Managing Director’s consent, N2.38bn irregularly paid as vehicle-status cash options, and over N1.21bn released to contractors without invoices or interim certificates. Other flagged expenditures cover demurrage on abandoned refinery cargoes, unauthorised virements and payments for abandoned projects.
Procurement abuses were also highlighted, including a vessel substitution that violated contract terms and inflated costs by $1.93m over 30 months. Auditors further reported weak compliance with statutory tax deductions, citing transactions where required VAT, withholding tax and stamp duties were not deducted.
The infractions occurred during the tenure of former Group CEO Mele Kyari, who was removed earlier this year and replaced by Bayo Ojulari. Civil society organisations have criticised NNPCL’s persistent opacity, arguing that political protection and weak oversight continue to hinder accountability in Nigeria’s oil sector.
