Nigeria State Oil Firm Gives Gov’t Informal Loans: Audit

Nigeria’s government owes the state-owned oil firm for improper, informal loans used to cover a range of expenses, from a presidential helicopter to maritime security, a report of a partial audit will say.

The audit, prepared by an outside organisation given access to accounts of the Nigeria National Petroleum Corp as part of a government effort to improve transparency at the firm, raises doubts over its independence.

Africa’s biggest oil producer and key supplier to the United States is pinning its future oil industry hopes on turning the debt-ridden NNPC into an independent profitable company emulating Brazil’s Petrobras or Malaysia’s Petronas.

NNPC has a budget agreed by parliament. Other revenue it collects from oil production is meant to be passed to the government accounts, but industry experts say powerful interests tap money before it is sent through official channels.

According to sources involved in the external audit, it will show outstanding debts owed to the oil company by a number of ministries and state agencies. The company paid for a $14 million presidential helicopter, and is owed $106 million by the state power firm and $124 million by a maritime security agency.

State governors are threatening to take the federal government to court over illegal tapping of oil revenues that should be shared with local government.

The finance ministry and NNPC declined to comment on the debts and the presidency and oil ministry did not respond to requests for reaction.

“We are aware of many of these debts, obviously it isn’t an ideal situation,” an NNPC source told Reuters on condition of anonymity.

Reuters