Refinery repairs: SERAP sues NNPC for alleged misuse of N825bn, $2.5bn

The Socio-Economic Rights and Accountability Project (SERAP) has filed a lawsuit against the Nigerian National Petroleum Corporation Limited (NNPCL) over its failure to account for N825 billion and $2.5 billion allegedly allocated for refinery rehabilitation and other oil-related expenditures.

The legal action, marked FHC/L/MISC/722/25, was filed on Friday at the Federal High Court in Lagos.

SERAP said it was acting on the basis of the 2021 audited report by the Auditor-General of the Federation, which was released to the public on 27 November 2024. The report raised concerns that large sums of public funds earmarked for critical oil sector operations may be missing or misappropriated.

In its court filings, SERAP contended that the allegations outlined in the report, along with recent remarks by business magnate Aliko Dangote, suggest serious breaches of public trust and violations of both domestic and international anticorruption obligations.

Dangote, President of the Dangote Group, had stated last week that the country’s refineries may never function properly again, despite a reported $18 billion spent on them over the years.

SERAP argued that allowing such large sums to go unaccounted for would undermine efforts to build transparency and accountability in the oil sector and that the failure to investigate or recover the funds contributes to poverty and economic stagnation.

According to the suit, the Auditor-General raised multiple red flags regarding NNPCL’s handling of refinery and oil-related funds. These include funds withdrawn without sufficient documentation, proceeds from crude oil and gas sales diverted before being remitted to the Federation Account, and various deductions from oil royalties and pipeline maintenance accounts without proper explanations.

The Auditor-General expressed concern that the unexplained transactions could result in funding gaps for the national budget and called for recovery of the amounts in question. He also recommended referring suspected individuals to the Economic and Financial Crimes Commission (EFCC) and the Independent Corrupt Practices Commission (ICPC).

SERAP stated that the missing money should be recovered and returned to the treasury, in the interest of ordinary Nigerians who continue to suffer from poor access to energy and deteriorating economic conditions.

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It added that the persistent failure of NNPCL to explain the whereabouts of the funds has eroded public confidence and deprived citizens of benefits from Nigeria’s oil wealth.

In its application, SERAP asked the court to compel the NNPCL to provide a detailed accounting of the funds and to take steps to recover all missing amounts. As at the time of filing this report, NNPCL has not issued any public response to the suit.

The suit, read in part: “According to the recently published 2021 audited report by the Auditor General of the Federation (AGF), the Nigerian National Petroleum Corporation Limited (NNPCL) failed to account for over N825 billion and USD$2.5 billion of public funds meant for ‘refinery rehabilitation’ and repairs, and other oil revenues.”

“The Auditor-General fears that the money may be missing.”

“The NNPCL reportedly failed to account for over N82 billion [N82,951,595,510.47] meant for ‘refinery rehabilitation and repairs.’ The ‘money was deducted from the sale of Crude Oil and Gas between 2020 and 2021’.”

“The Auditor-General fears the money may be missing. He wants the money recovered and remitted to the Federation Account. He also wants the NNPCL ‘to ensure that the amounts due for the Federation Account are not subjected to any deductions before remittance of net.’”

“The NNPCL also reportedly failed to account for over N343 billion [N343,642,598,726.51] ‘being proceeds from domestic crude sales.’ The ‘money, meant for ‘pipelines maintenance and management costs, was unilaterally deducted from the gross domestic crude sales.’”

“The Auditor-General fears ‘the money may have been diverted.’ He wants the money recovered and remitted to the treasury. He also wants the NNPCL to hand over those suspected to be involved to the EFCC and ICPC.”

“The NNPCL also reportedly failed to account for over N83 billion [N83,659,813,739.99] ‘being miscellaneous income from the NNPC joint venture operations from 2016 to 2020.’ The ‘money was withdrawn from the CBN/NNPC sinking fund account [a suspense account].’”

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“The Auditor-General is concerned that this practice ‘has led the Federation to resort to borrowings.’ He wants ‘the money recovered and remitted to the treasury.’”

“The NNPCL also reportedly failed to account for over N204 billion [N204,853,744,047.39] ‘being unjustified deductions from the oil royalties for 2021.’ The ‘money was due to the Department of Petroleum Resources (DPR) now Nigerian Upstream Petroleum Regulatory Commission (NUPRC).’ The Auditor-General fears ‘the money may have been diverted.’ He wants the money recovered and remitted to the treasury.”

“The NNPCL also reportedly failed to account for over N3.7 billion [N3,748,581,281.27] ‘being money purportedly paid to a Company as a shortfall on sales of MT cargo of PMS.’ The Auditor-General fears the money may be missing.

He wants the money recovered and remitted to the treasury.”

“The NNPCL also reportedly failed to account for over N28 billion [N28,654,179,867.00] ‘being outstanding bridging allowance from NNPC retail for 2021.’”

“The NNPCL failed to account for over N13.5 billion [N13,5559,658,148.91] ‘being outstanding bridging allowance claims from three major oil marketers in 2021.’”

“The Auditor-General is concerned that this ‘may have resulted in difficulty in funding the 2021 budget.’ He wants

‘the money recovered from both the NNPC retail and the major oil marketers and remitted to the Federation Account.’”

“The NNPCL also reportedly failed to account for over N15 billion [N14,134,947,949.80 and N1,087,533,332.62] ‘being outstanding revenues from debts owed by twenty-six marketers for 2021.’ The Auditor-General wants ‘the money recovered from the oil marketers and remitted to the Federation Account.’”

“The NNPCL reportedly failed to account for over $29.6 million [$29,648,970.36] being outstanding royalties payable to the Department of Petroleum Resources CBN account.’ The Auditor-General is concerned this ‘may have resulted in difficulty in funding the 2021 budget.’ He wants the money recovered.’”

“The NNPCL failed to collect over $2 billion [$2,260,448,992.45] ‘being outstanding oil royalties from oil companies for 2021’, and failed to collect over N48 billion [N48,218,163,192.67] ‘also being outstanding oil royalties from oil companies.’”

Refinery repairs: SERAP sues NNPC for alleged misuse of N825bn, $2.5bn