Nigeria lost over one million barrels of crude oil in a transaction between the Nigeria National Petroleum Corporation (NNPC) and the Liberian Petroleum Refining Company [LPRC], according to an audit report prepared for the Liberian government.The losses were incurred during the execution of a contract between the NNPC and LPRC for the supply of 10,000 barrels of crude oil per day for a year to the government of Liberia through Addax oil company in 2006-2007, but Addax ended up lifting an excess 1,002,796 barrels, the report said.'The total quantity of crude oil that the Government of Nigeria through its NNPC agreed to supply to the Government of Liberia through its LPRC was 3,650,000, amounting to 10,000 barrels per day.'But'Addax continued to lift crude oil in the name of Government of Liberia/LPRC in excess of the agreed upon quantity. The total quantity that was uncovered as being lifted by Addax was 4,652,796 barrels at a total value of US$318,761,591.24. This means 1,002,796 barrels was lifted in excess of the agreed upon quantity,' said the report, which was prepared by Liberia's Auditor-General John S. Morlu in April 2011.Morlu blamed NNPC for the problems in executing the contract, which he said was not legally consummated. 'Even though the NNPC did not sign the prepared agreement with LPRC for the supply of the agreed 10,000 barrels of crude per day, the former went ahead and supplied the oil, a situation unexpected in business dealings,' he said.The report said there was no legally binding contract, much less contract modifications, that would provide the legal basis for Addax to lift the excess in the name of the government of Liberia/LPRC. 'In all manner of respect, the 'oil deal' was not transparently executed. It was marred by secrecy,' Morlu said.He said neither NNPC nor Addax could provide any justification for the excess oil lifting, adding: 'This further demonstrates that this 'Nigerian oil deal' was characterised by a complete lack of transparency, making it difficult to indicate whether value for money was achieved.'The Auditor General said he 'sent a team of auditors to NNPC in Nigeria but the cooperation was limited, as NNPC could not indicate the substantive basis for consummating a contractual agreement in the absence of a valid contract that was not duly signed and notarised.'The report said the revenue raised for the Government of Liberia through the deal was understated by US$104,991.32. Addax overpaid fees on its crude lifting as recorded by LPRC to the tune of US$6,599.88. As a result, net shortfall in revenue reported was US$98,391.44.'Though Addax later remitted the amount to LPRC after I discovered the irregularities leading to the shortfall, in my opinion, the entire oil contract was covered with vagueness. Again, I therefore could not determine whether the deal met the desired benefit for which it was intended,' the Liberian Auditor General added.Daily Trust made unsuccessful efforts to get NNPC's comments on the Liberian audit report. Spokesperson for NNPC Dr. Levi Ajuonuma did not answer or return phone calls, nor did he reply to text messages sent to him by our reporter asking for comments.But a source at the public affairs unit of Addax Petroleum Limited, who refused to be named, said they were aware of a similar report 'some years back' but that the report 'was not referring to Addax Petroleum and Exploration.' He said Addax is not involved in oil trading but only in exploration and production, and so 'there may be a company bearing a similar name which is involved in the Liberian oil deal.
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