The Nigerian National Petroleum Company Limited (NNPC) is again at the centre of a financial accountability crisis after the Auditor-General of the Federation uncovered over $51 million paid out under questionable circumstances, alongside multiple breaches of financial regulations and weak internal controls.
The revelations, contained in an explosive 808-page audit report submitted to the National Assembly in September 2025, cover transactions carried out between 2020 and 2021 during the tenure of former Group Chief Executive Officer, Mele Kyari.
According to the report seen by PLATFORM TIMES, the state oil company was involved in misapplied funds, inflated and irregular contracts, unauthorised renewals, non-remittance of statutory taxes, and payments made without supporting documents.
One of the most alarming findings was NNPC’s failure to deduct the mandatory 1 per cent Stamp Duty on payments totalling N24.7 billion and $52.98 million to contractors and service providers.
This represents unpaid taxes of N247 million and $529,863, a clear contravention of Treasury Circulars and the Financial Regulations mandating Stamp Duty, VAT and WHT deductions.
The Auditor-General warned that such lapses “expose public funds to diversion, loss of revenue and overpayment to contractors.”
NNPC management claimed it was still engaging the Federal Inland Revenue Service (FIRS) to clarify the applicability of the duties, a response deemed “unsatisfactory” by auditors.
The Auditor-General consequently directed the GCEO to recover and remit all unpaid taxes and provide evidence to the Public Accounts Committees (PAC) of the National Assembly.
The audit further flagged $22.84 million paid to a contractor for the controversial 2017/2018 Direct Sales Direct Payment (DSDP) arrangement.
Although crude oil and products were supplied, reconciliation records revealed that the company was not owed the amount paid.
NNPC’s defence, that the relevant Crude Oil Marketing Division (COMD) had been dissolved and records were difficult to retrieve, was dismissed by the audit team, which insisted that the payment “remains irregular until fully justified.”
The GCEO was ordered to recover and remit the full $22.84 million to the government treasury.
Another anomaly involved the unauthorised renewal of a vessel charter contract by the Chief Operating Officer (COO) Downstream for one year without approval.
Despite lacking approval, $1.8 million was paid within nine months.
NNPC cited the COVID-19 lockdown as justification for the “anticipatory approval,” but the Auditor-General rejected the explanation, warning that such practices encourage “payments without legal or contractual basis.”
The audit uncovered further irregular payments totalling $2.01 million and N478.5 million for the Atlas Cove Depot Optimisation Project.
No invoices, receipts or credible documentation were provided.
NNPC insisted the SAP references given by auditors were insufficient to trace the transaction, but auditors maintained their position and directed immediate recovery of the funds.
The NNPC was also indicted over the emergency procurement of custody transfer metres worth $8.21 million (later revised to $8.23 million).
Instead of delivering metres to 11 specified pipeline locations, the contractor diverted the consignments to NNPC’s Port Harcourt office.
The management again argued that auditors used incorrect SAP details, but their defence was rejected.
The GCEO was instructed to recover $8.2 million and remit same to the Treasury.
In a startling revelation, a contractor owed $1.03 million for vessel charter services between 2007 and 2010 was bypassed, and the money was instead paid to a different company that had no contractual relationship with NNPC.
NNPC justified the action by citing an indemnity agreement, but auditors ruled the explanation “unsatisfactory” since no valid transfer of contract or Power of Attorney existed.
The Auditor-General ordered the full recovery of the $1.03 million.
The report also indicted NNPC for questionable variations and overpayments totalling $1.93 million on coastal vessel charter contracts.
Again, the company’s explanations were dismissed, and the findings upheld.
Auditor-General: Weak Controls, Poor Documentation, Risk of Diversion
Across all queries, auditors complained of: weak internal control systems ; poor or missing documentation; inability to provide verifiable SAP records; irregular approvals and anticipatory contract renewals; questionable payments running into tens of millions of dollars .
Despite NNPC responding to each query, auditors described the replies as “consistently unsatisfactory.”
They ordered the GCEO to: recover all misapplied funds; remit them into the Treasury ; justify all irregular payments before the National Assembly, and ; and ensure full compliance with Financial Regulations, 2009.
The infractions occurred under the leadership of Mele Kyari, who served as GCEO from 2019 until his removal earlier this year. He has since been replaced by Bayo Ojulari
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