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A high-stakes confrontation between the Nigerian Senate and the Nigerian National Petroleum Company Limited (NNPCL) has intensified, as the Senate Committee on Public Accounts firmly insists that the national oil company must provide a detailed account for a staggering ₦210 trillion identified in its audited financial statements from 2017 to 2023.

The committee has clarified that while it is not alleging theft, it demands transparency and a thorough explanation for what it has described as “vague financial information” and “mind-boggling” figures that remain “unnetted.”

The protracted dispute reached a boiling point this week when the Group Chief Executive Officer (GCEO) of the NNPCL, Mr. Bayo Ojulari, failed to appear before the committee for a second time, despite a July 10 deadline.

His absence has been met with indignation from senators, who have accused the NNPCL of disrespecting the Nigerian constitution and its citizens.

The Heart of the Matter: Accrued Expenses and Receivables

At the core of the controversy are two line items in the NNPCL’s audited financials over a seven-year period. The Senate committee, chaired by Senator Aliyu Wadada, has flagged approximately ₦103 trillion recorded as “accrued expenses” and another ₦103 trillion (with some reports citing ₦107 trillion) listed as “receivables.”

Senator Wadada, in a detailed explanation, broke down the committee’s concerns. He highlighted that the accrued expenses include retention fees, legal fees, and auditors’ fees.

“Retention is known, of course, to be 5% of the total contract sum. And no reference, no mention, was made to the contracts that led to this retention,” Wadada stated. He further questioned the lack of details for the accrued legal and auditors’ fees.

The committee’s bewilderment was compounded when, just before a recent hearing, the NNPCL submitted a new document with figures that contradicted its own official audited statements. “This we found very ridiculous, very unacceptable,” Wadada remarked, emphasizing the inconsistency.

The chairman has repeatedly stressed the gravity of the situation, stating, “We never said NNPCL stole ₦210 trillion, but we insist you must account for ₦210 trillion. You have an account that is not netted off, so it can’t be acceptable to us.”

“Netting off” is a standard accounting practice of offsetting liabilities against assets to present a clear financial position. The committee argues that the failure to do so with such colossal sums obscures the true financial state of the national oil company.

A Tense Standoff and Accusations of Disrespect

The NNPCL’s handling of the Senate’s inquiry has drawn sharp criticism from lawmakers. The GCEO’s recent no-show, attributed to his attendance at an Organisation of the Petroleum Exporting Countries (OPEC) meeting abroad, was not well-received. The Chief Financial Officer, Mr. Dapo Segun, who appeared in his stead, could do little to placate the visibly angered senators.

“Today, the same Nigerians, through the Senate, are asking you to come and explain your financial statement, and you are not available,” lamented Senator Abdul Ningi.

Echoing this sentiment with stronger words, former governor and Senator Adams Oshiomhole described the NNPCL as “dirty” and “having a track record of corruption.” He added, “Anybody who is too big to obey the Constitution of Nigeria should relocate. We are empowered by our constituents to do what we are doing.”

The committee chairman, Senator Wadada, also took umbrage at public commentary suggesting the senators lacked the financial acumen to comprehend the NNPCL’s statements.

He pointed to the committee’s composition, which includes former governors, chartered accountants, and a Senior Advocate of Nigeria (SAN). “It is insulting,” Wadada asserted, if the NNPCL implies that experienced individuals like former Gombe State Governor and Accountant-General of the Federation, Senator Ibrahim Dankwambo, and Senator Ede Dafinone, from a renowned accounting family, cannot understand financial documents.

Broader Implications for NNPCL’s Future and National Agenda
This financial scrutiny comes at a critical juncture for the NNPCL, which has been making preparations for an Initial Public Offering (IPO).

The Senate has warned that such unresolved financial discrepancies and a lack of transparency could jeopardize the company’s ability to attract credible investors on the international market. The IPO is a key component of the reforms encapsulated in the Petroleum Industry Act (PIA) 2021, aimed at transforming the NNPCL into a commercially viable entity.

Senator Wadada has linked the committee’s probe to the broader national interest, particularly President Bola Tinubu’s “Renewed Hope Agenda,” which requires significant funding. “Changing these narratives, which are enveloped by the Renewed Hope Agenda, cannot be achieved without the needed and required funding,” he said. “These figures are mind-boggling, they are scary, they are, of course, worrisome.”

The Senate committee has now adjourned the session and will communicate a new date for Mr. Ojulari’s appearance, with a stern warning that his personal attendance is not negotiable.

The outcome of this escalating standoff will not only determine the extent of transparency within Nigeria’s crucial oil sector but also cast a long shadow over the NNPCL’s future ambitions and the nation’s economic reform agenda.

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