By Dele Sobowale
The NNPC is disturbed by the findings of the NEITI report for many reasons. The first is when an audit is carried out on any organisation, the organisation is engaged with a view to reconciling the figures; smooth areas of disagreements and agreements.

In these processes that are critical aspects of auditing, NEITI did not consult with NNPC on any of these. We ask where did the NEITI get its figures from when it is not present at any of the oil terminals or oil stations? All the information they got were voluntarily given and therefore there is need to crosscheck their information before going to press.”

Dr Levi Ajuonuma, Group General Manager, Group Public Affairs Division of NNPC.

Dr Levi Ajuonuma, erudite and a worthy defender of the Nigerian National Petroleum Corporation, NNPC, was reacting to a damning audit report carried out by two auditing firms appointed by the Nigeria Extractive Industries Transparency Initiative, NEITI, the Hart Group of the United Kingdom and S.S. Afemikhe and Company of Nigeria.

Incidentally, this is not the first time the Hart Group would audit the NNPC account and despite the number of years between the first encounter, when Ajuonuma was not there to polish NNPC’s very dirty image, and now, the verdict of the auditing firms have remained the same – the NNPC is a cesspool of unimaginable corruption.

Reading Ajuonuma’s lamentations, one would come away with the impression that he seems to assume that his audience knows nothing about audit procedures and therefore needs to be lectured on them. He is wrong; dead wrong. Among his listeners are captains of industry, board directors, etc who understand the processes of audit. Some might even have known them while Ajuonuma was still in his nappies.

The process he describes obtains strictly when the auditor is the firm’s auditor – in other words if the Hart Group and Afemikhe and Co were engaged by NNPC to audit its accounts. Because the mandate of NEITI is different, and the transparency organisation engaged Hart and Afemikhe and Co, their primary reporting responsibility is to NEITI, not NNPC.

They submit their report to NEITI and NEITI does what it wants with it – including, perhaps calling on NNPC to reconcile figures. Perhaps, it is in a bid to avert the collusion that often exists between auditors and organisations, in the process of “reconciliations” and “smoothening out disagreements and agreements” that NEITI had forbidden the audit firms from engaging in that horse trading exercise.

Millions of Nigerians lost trillions of naira on account of the “reconciliations” and “smoothening of disagreements and agreements” by auditing firms and banks like Oceanic and Intercontinental. So, Levi needs not elevate what is a discretionary step to the level of gospel.

Interestingly, the NNPC spokesman did not fault any of the findings of the Hart Group and Afemikhe; all he is harping upon is a discretionary process not being followed. That sounds, suspiciously, like a lawyer wanting to get his client, accused of heinous crimes, off the hook on technicalities without reference to the merits of the case.

If Dr Ajuonuma wants to know, the charges against the Board of Directors, Executive Directors and Management of NNPC include, but are not limited to, economic sabotage bordering on treason (at least they would be treasonable if committed in China); immeasurable looting of national assets; criminal self-enrichment and as a result, massive tax evasion.

So, the NNPC image maker will need to brush up more on his grammar and defence skills because he faces an uphill task. In fact, he is engaged in a battle which he and the NNPC cannot really win – try as they may. Let us start by examining the basic charge made by the auditing firms.

According to them,“Production and lifting data reported by the Department of Petroleum Resources, DPR, and other companies, including NNPC, and terminal operators, were inconsistent and therefore could not be fully reconciled.

This prevented a coherent mass balance being presented by the audit. DPR reported 1.2m barrels less in 2006; 0.08m more in 2007; and 1.4m more in 2008 than was reported by companies.” There is more in the report; but let us pause here and examine what we are reading.

This is 2012; granted the report was ready in 2011. Even, if we “pretend” that we are still in 2011, what Nigerians are being told is that the accounts for 2006, 2007 and 2008 have not yet been fully reconciled – that is five, four, and three years after the financial years ended.

The first and most obvious question the NNPC spokesman should answer is: which other national oil company worldwide waits for five years to audit its accounts? More to the point, since it is possible that many of the top executives of NNPC own their own companies, how many of them would allow the managers of those companies to wait five years before rendering the accounts of their stewardship?

At the very least, the Hart and Afemikhe audit report had exposed gross and possibly criminal negligence on the part of the NNPC Group Management.

The Nigerian National Petroleum Corporation Decree 33 of 1977, signed into law by Obasanjo on April 21, 1977 is the witness on the charge of “gross and possibly criminal negligence.” (See “Dele leaks” p 274). The decree stated quite clearly in Section 6(2) as follows:

“The Corporation shall as soon as may be after the end of the financial year, to which the accounts relate, cause its accounts to be audited by auditors appointed by the Corporation with the approval of the Federal Executive Council.”

It will require the most imaginative mind to construe “as soon as may” to mean five, four or even three years. So, why are crude productions figures for the years 2006, 2007, and 2008 still being disputed?

Furthermore, both Hart and Afemikhe are not reporting anything new. As far back as 2005, a report in the Financial Times of London by Michael Peel, an associate fellow of Chatam’s House’s African Programme, had made the claim that $3.5 million worth of crude is stolen each day from the Niger-Delta.

(“Dele leaks” p 282). A responsible national corporation would have taken that as a slap on the face and tried to find the sources of leakage. In a related development, an elder statesman, while “Dele leaks” was being written, had traced the movement of a crude-laden vessel from Nigeria to a terminal point in Europe.

The difference was astonishing; only half of what the vessel carried from Nigeria was declared as our export on the trip. It was certainly not an isolated case.

Before this series is finished, Dr Levi Ajunuoma might discover that he needs all his admitted erudition and more to make a good case for an organisation which stinks from Aso Rock, through the Ministry and NNPC to the creeks. In fact, if the true story of NNPC were ever to be written, nobody connected with it, however remote, will go un-indicted.

To be continued….