In a bold move to ensure financial accountability in Nigeria’s oil sector, the House of Representatives Committee on Public Accounts has launched a high-stakes investigation into the Nigerian National Petroleum Company Limited (NNPC Ltd) and several oil firms over their alleged failure to remit $1.6 billion in royalties to the Federation Account.
The probe, announced on Tuesday, stems from a damning 2021 audit report by the Office of the Auditor-General for the Federation (OAuGF), which flagged significant discrepancies in remittances tied to Production Sharing Contracts (PSCs), Repayment Agreements, and Modified Carry Arrangements.
According to the report presented at the hearing, NNPC Ltd and various oil companies collectively owed the Federation an outstanding $1.6 billion as of December 2021. The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) further revealed that these debts arose from long-standing contractual obligations under oil and gas production agreements.
Complicating the matter, NNPC Ltd has counterclaimed that the Federation itself owes the company a staggering N1.9 trillion. This financial standoff has further muddled reconciliation efforts, raising concerns over transparency and accountability in the management of Nigeria’s oil revenues.
Defending NNPC’s position, the Group Chief Executive Officer, Mele Kyari, represented by Chief Financial Officer, Dapo Segun, asserted that portions of the funds in question were lawfully allocated to Government Priority Projects (GPP) and petrol subsidy payments—expenditures approved in national budgets by the National Assembly. He clarified that no deductions for these projects were made in 2023 and 2024 due to provisions under the Petroleum Industry Act (PIA).
Segun also disclosed that a comprehensive reconciliation process, spearheaded by Minister of Finance and Coordinating Minister of the Economy, Wale Edun, is currently underway to resolve NNPC’s N1.9 trillion claim against the Federation. “Once concluded, the findings will be made available to all relevant agencies,” he assured.
Chairman of the Sub-Committee, Hon. Akinlade Isiaq, reaffirmed the House’s determination to recover all outstanding debts, stating that the probe will extend through 2025 to assess the status of payments as of December 2024.
“This investigation is crucial to ensuring that Nigeria’s resources are fully accounted for. We will take all necessary measures to recover what is rightfully owed to the Federation,” Isiaq declared, emphasizing the committee’s commitment to enforcing financial discipline in the petroleum sector.
As part of the probe, the House has also summoned oil companies implicated in the NUPRC report, which revealed that as of September 30, 2024, these firms collectively owed an additional $929 million in unpaid obligations.
The ongoing scrutiny highlights Nigeria’s deepening push for transparency in its oil industry, a sector that contributes over 80% of the country’s national revenue. With public finances already strained by the removal of fuel subsidies and other economic reforms, lawmakers, civil society organizations, and financial watchdogs have intensified calls for stricter oversight of NNPC Ltd, particularly since its transition to a fully commercial entity under the PIA (2021).
The House Committee has also extended invitations to key financial institutions and regulatory bodies—including the Central Bank of Nigeria (CBN), Federal Inland Revenue Service (FIRS), Nigeria Extractive Industries Transparency Initiative (NEITI), and the Revenue Mobilization Allocation and Fiscal Commission (RMAFC)—to provide further clarity on fiscal processes and legal frameworks governing petroleum revenue remittances.
As Nigeria grapples with economic challenges and rising calls for financial prudence, the outcome of this high-profile probe could have far-reaching consequences for the future of oil revenue management in the country.
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