Senate Queries ₦5bn Spent On NNPC Name Change, Raises ₦210tn Concerns

A fresh controversy has emerged around the financial operations of the Nigerian National Petroleum Company Limited as the Senate Public Accounts Committee raised concerns over billions of naira spent during the company’s transition from NNPC to NNPCL. During a press briefing, the chairman of the committee, Senator Ahmed Wadada Aliu, questioned the justification for the expenditure and described the situation as unacceptable in the present economic climate.

According to the senator, about ₦5 billion was expended simply to change the name of the Nigerian National Petroleum Corporation to the Nigerian National Petroleum Company Limited. He expressed disbelief that such a huge figure could be committed for what he described as incorporation expenses, noting that the committee had rejected the explanation presented.

The committee revealed that NNPC paid ₦2.9 billion for incorporation expenses from petroleum product proceeds, while the National Petroleum Investment Management Services also charged ₦2.9 billion against crude oil revenue for the same purpose. The two transactions resulted in a combined amount of about ₦5.9 billion spent for the incorporation process linked to the name change.

Senator Wadada stressed that the committee considered the expenditure unacceptable and insisted that public funds must be managed with transparency and accountability. He maintained that the development was among several issues discovered during the ongoing legislative inquiry into the audited financial statements and operations of the national oil company.

The investigation covers financial records from 2017 to 2023 and was initiated as part of the Senate’s constitutional mandate to ensure accountability in the management of public funds. The committee explained that the inquiry began after financial management lapses were observed in the Auditor General’s annual reports for earlier years.

During the review of the financial statements, the committee said it discovered figures that could not be properly explained by the management of the oil company. One of the most contentious figures involved ₦103 trillion listed as accrued expenses in the company’s 2022 audited financial statements.

According to the committee, the amount was said to consist of retention fees, legal fees and audit fees. However, no detailed breakdown was provided in the audited statement showing how the funds were allocated among those items. The explanation later offered by the company indicated that the figure represented cumulative amounts expended by joint venture partners through cash calls, a claim the committee said contradicted existing disclosures.

The lawmakers also raised concerns over ₦107 trillion recorded as sundry receivables as of December 2023. The company reportedly stated that part of the money was owed by defunct banks and other entities, but the committee said no detailed information was provided to identify the institutions involved.

Because of these unresolved issues, the committee said the combined figure of ₦210 trillion remains questionable and cannot be netted off according to standard accounting principles. As a result, the Senate panel resolved that the national oil company must account for the amount.

The committee also directed that former management officials, including former Group Managing Director Mele Kyari, former Chief Financial Officer Umar Ajiya and other key officials, should appear before the panel to provide explanations alongside the company’s external auditors who handled the financial reviews during the period under investigation.

In addition, the Auditor General for the Federation has been asked to conduct a forensic audit of the company’s financial statements for the years under review. The Senate committee emphasized that the exercise is aimed at strengthening accountability and ensuring that public funds are properly managed for national development.

Watch the full video below.