The liabilities of the Nigerian National Petroleum Corporation (NNPC) Group has exceeded the assets of the oil firm by N4.4 trillion in 2019, the just released audited financial statements of the firm for 2019 showed.
In the same vein, the report further revealed that the oil firm’s liabilities as a corporation also exceeded its assets by N1.1 trillion.
The auditors expressed significant doubt on the continued existence of NNPC as a going concern considering the level of liability being shouldered by the oil firm.
The auditors include PriceWaterhouseCoopers (PwC), SIAO Partners and Muhtari Dangana and Co.
Explaining the material uncertainty relating to going concern at the oil firm, the auditors expressed doubt on the group and corporation’s ability to continue as a going concern.
They said, “We draw attention to note 42 of the consolidated and separate financial statements, which indicate that the group recorded a net loss of N1.8 billion (corporation: net loss of N107.8 billion) during the year ended 31, December 2019.
“As at that date, the group’s current liabilities exceeded its current assets by N4.4 trillion (corporation: N1.1 trillion).”
The 2019 Report came five months after the 2018 AFS report was published.
Mele Kyari, the director-general of the NNPC said that running a transparent NNPC is in consonance with the principles of the Extractive Industries Transparency Initiative (EITI) of which the oil firm was a partner.
A further breakdown of the report shows that general administrative expenses witnessed a 22 per cent dip from N894 billion in 2018 to N696 billion in 2019.
the report also show that the corporation said majority of the subsidiaries posted improved performance.
The subsidiaries are the Nigerian Petroleum Development Company Limited (NPDC) which recorded N479 billion profit in 2019 compared with N179billion in 2018, representing 167 per cent increase.
Meanwhile, Umar Ajiya, the corporation’s chief financial officer (CFO), said: “The Integrated Data Sciences Limited (IDSL) recorded N23 billion profit in 2019 compared with N154 million in 2018, representing 14,966 per cent increase and the Petroleum Products Marketing Company (PPMC) recorded N14.2 billion profit in 2019 compared with the N9.3 billion recorded in 2018, representing 52 per cent increase.
“Also, the refineries maintained the same level of losses as in 2018 but which will reduce significantly in 2020 due to cost optimisation drive.”
He added that the improved performance in the 2019 financial year was driven mainly by cost optimisation, contracts renegotiation and operational efficiency.
“The 2019 AFS goes further to demonstrate our unwavering commitment to the principle of Transparency, Accountability and Performance Excellence (TAPE) while the outlook for 2020 looks promising in view of the management’s strong drive to prune down running cost and grow revenues,” Ajiya said.