Senate uncovers $303bn crude oil diversion under NNPC’s DSDP scheme

A forensic review conducted by consultants to the Senate Ad-hoc Committee on oil theft has uncovered staggering financial irregularities amounting to over $303 billion in unaccounted crude oil proceeds and diversions linked to Nigeria’s crude sales and the now-defunct Direct Sale Direct Purchase (DSDP) programme of the Nigerian National Petroleum Company (NNPC) Limited.

The revelations, contained in the committee’s forensic report, exposed large-scale diversion of crude oil proceeds between 2017 and 2022, including crude designated as Tax Oil, Royalty Oil, and Profit Oil.

According to the findings, between 2017 and 2021 alone, over $22 billion was lost to crude oil sale differentials, mismatches, and unaccounted funds.

“In 2017, crude oil taken as domestic crude under the DSDP by fifteen oil marketing companies was 71,883,502 barrels valued at $3.95 billion.

“Out of this, over 27 percent valued at $1.09 billion was diverted or stolen,” the report revealed.

The consultants further disclosed that the same year, crude accruable to the Federation as Tax Oil was 22,152,550 barrels valued at $1.23 billion, out of which $844 million, representing 68 percent was diverted.

The pattern of theft reportedly intensified in subsequent years.

In 2019, domestic crude worth $6.78 billion was lifted by 16 oil marketers, with over $3.03 billion (44.7 percent) diverted.

Similarly, Tax Oil, valued at $2.51 billion, recorded a 40 percent loss, estimated at $1 billion.

The report also showed that between January and May 2022, 57 of 125 vessels involved in the DSDP programme were used to divert crude oil worth $4.49 billion, while Tax Oil valued at $696 million between February and June 2022 was also diverted to non-federation accounts.

“In 2018, 2020 and 2021, over $5 billion of Tax Oil and an estimated $6 billion of domestic crude were diverted,” the report added.

Beyond local losses, the forensic team revealed a total shortfall of $81 billion between crude proceeds declared by the NNPCL and Department of Petroleum Resources (DPR) from 2016 to 2017, and the actual receipts declared by the Central Bank of Nigeria (CBN).

The Committee’s foreign review further projected the discovery of over $200 billion in unaccounted crude oil sales proceeds from 2015 to date, based on ongoing international investigations in the United Kingdom, United States, and Canada.

The report also uncovered more than ten foreign joint venture crude oil proceeds accounts in both naira and dollars, opened in Nigeria and overseas, outside official government channels.

The consultants, through human intelligence (HUMINT) from 16 Niger Delta-based companies, identified several conduits for crude theft and revenue leakage.

They noted that poor inter-agency coordination, obsolete monitoring technology, and a lack of synergy among surveillance systems were key enablers of the theft.

The committee recommended that the Federal Government authorize a verified service provider and consultant to recover seized, stolen, or diverted crude oil in collaboration with security agencies, including the Joint Task Force (JTF), Nigerian Navy, NUPRC, and EFCC, with transparent remittance of recovered funds.

The committee also called for a special court to prosecute oil thieves, restoration of the Weights and Measures Department to the upstream sector for accurate crude metering, and immediate implementation of the Host Communities Development Trust Fund (HCDTF) under the Petroleum Industry Act (PIA) to curb sabotage.

Senator Ned Munir Nwoko, who presented the report, said the findings show “an urgent need for coordinated local and international recovery efforts.”

He stated, “The forensic review by the consultants revealed over $22 billion, $81 billion, and $200 billion, respectively, as unaccounted crude oil proceeds.

“These must be traced and recovered for the benefit of the country.”

The report concluded by urging the Federal Government to adopt its recommendations to deter future oil theft, strengthen transparency, and recover billions lost to systemic corruption in the oil sector. (BusinessDay)