November 15, (THEWILL) – The immediate past Group Chief Executive Officer of the Nigerian National Petroleum Company Limited (NNPC Ltd), Engr. Mele Kyari, on Tuesday November 10, 2026, appeared before the Senate Committee on Public Accounts. Kyari disclosed on his X that the engagement was to provide clarifications on matters relating to his tenures as Group Managing Director of NNPC and subsequently Group Chief Executive Officer of NNPC Limited.
“At the heart of my presentation was the need to correct certain misconceptions and misinformation surrounding the financial records of the company, particularly the allegation that N210 trillion was lost under my leadership.
“I stated unequivocally before the committee that no such funds were lost. The figure arose from accounting entries and bookkeeping descriptions, not the disappearance or loss of money. I provided explanations on the relevant entries and reaffirmed my readiness to offer any additional clarification the committee may require,” Kyari said.
The calm that followed Kyari’s engagement with the lawmakers was a surprise to Nigerians. Given the publicity and drama the matter had generated at the National Assembly among the lawmakers, one would have thought that the lawmakers had incontrovertible evidence of a missing N210 trillion in the coffers of NNPC Ltd. It is now obvious that the whole show was a mere theatrical display of parliamentary powers by the fire-brand lawmakers insisting on “seeing” Kyari. And they did see him.
The N11 trillion pipeline stuff
Perhaps the engagement should also end the controversial N11 trillion pipeline surveillance contract that had lingered for a long time. The central question is this: Does the claim that NNPC awarded or incurred an N11 trillion pipeline surveillance contract correspond with the company’s documented financial transactions, contractual obligations and audited financial position?
A study of the NNPC’s financial statements showed at least five important areas of contradiction that challenge the claim. Industry experts who commented on the matter noted that an important accounting distinction must be maintained: a large contract’s total value, its cumulative payments, its annual expenditure and its outstanding commitments are not necessarily the same thing.
“A balance sheet alone cannot establish that a contract does not exist. The stronger test is whether the claim can be reconciled with the audited accounts, cash-flow statement, notes to the accounts and procurement records,” said Mike Akannor, an economist and financial analyst.
The most effective way to interrogate the alleged N11 trillion pipeline surveillance contract is to move the debate beyond the headline figure and examine what NNPC’s own financial records disclose about its operations, expenditure, liabilities, assets and financial performance.
The central question is this: Does the claim that NNPC awarded or incurred an N11 trillion pipeline surveillance contract correspond with the company’s documented financial transactions, contractual obligations and audited financial position?
There are five important areas of contradiction to investigate. However, an important accounting distinction must be maintained: a large contract’s total value, its cumulative payments, its annual expenditure and its outstanding commitments are not necessarily the same thing. A balance sheet alone cannot establish that a contract does not exist. The stronger test is whether the claim can be reconciled with the audited accounts, cash-flow statement, notes to the accounts and procurement records.
Contradiction 1: Misrepresentation of N11.2 trillion
The first and most fundamental contradiction is the misrepresentation of the N11.2 trillion figure as the value of a pipeline surveillance contract.
NNPC’s 2025 audited financial statements recorded approximately N11.201 trillion as other receivables from the Federation. This is an amount carried as owing to the company by the Federal Government, relating to advances and costs incurred on behalf of the Federation, including security-related expenditure.
According to Akannor, it is not an accounting entry identifying a single pipeline surveillance contract worth N11.2 trillion. Neither does it establish that the entire amount was awarded to one contractor or paid to a private security company.
“An examination of the accounts confirms that the N11.2 trillion represents Federation-related receivables, not money paid to pipeline surveillance contractors. This is important because there is a fundamental difference between a contract award, an expenditure, a payment and a receivable. Treating these four accounting and procurement concepts as interchangeable creates a misleading narrative.”
A contract worth N11.2 trillion would require evidence of the contracting parties, scope of work, award date, contractual duration, payment schedule and procurement approvals. A receivable in the balance sheet cannot independently establish any of these.
Contradiction 2: NNPC recognised zero new energy security expenses in 2025
This is another strong accounting evidence against presenting the N11.2 trillion as a fresh 2025 pipeline surveillance expenditure.
According to Note 24.2 of the 2025 financial statements, NNPC recognised no energy security expense in 2025, compared with N7.13 trillion recognised in 2024. The explanation is that the company undertook a reconciliation with relevant government agencies and offset outstanding energy security cost receivables against royalties, taxes and dividends due to the Federation. The reconciliation was concluded in September 2025.
The accounts also showed that N8.672 trillion in energy security receivables was carried forward from the preceding year before the reconciliation exercise.
Consequently, the N11.201 trillion appearing in the 2025 accounts cannot legitimately be described as N11.2 trillion of fresh pipeline surveillance spending in that financial year. An amount carried forward, subsequently reconciled or offset against other obligations is not equivalent to a fresh cash payment.
Accounting experts maintain that anyone presenting the entire N11.2 trillion as money newly awarded or disbursed in 2025 must explain how that interpretation can be reconciled with the company’s explicit disclosure that no energy security expense was recognised during the year.
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Contradiction 3: Sharp drop in pipeline maintenance expenditure
Another important contradiction emerges from the pipeline maintenance figures. NNPC’s 2025 financial disclosures showed that expenditure specifically classified as pipeline maintenance declined 98 percent from N149.478 billion in 2024 to N13.813 billion in 2025.
This raises an important question: if the N11.2 trillion was supposedly a pipeline surveillance contract expenditure, why does the financial statement not show a corresponding pipeline-related expense of that magnitude?
There is, however, an important qualification. NNPC’s other direct costs increased from N566.540 billion to N1.277 trillion. This broader category includes the maintenance and operation of wells, production facilities, pipelines and processing infrastructure, among other expenses.
“Therefore, the decline in the specific maintenance line does not prove that all pipeline-related activities declined. But it makes it particularly important to distinguish surveillance payments from maintenance, repairs, integrity management and other operational costs. A broad Federation receivable cannot be relabelled as a pipeline surveillance contract simply because pipeline security is one of the activities covered by the underlying government arrangement,” Akannor explained in a note to THEWILL.
Contradiction 4: Production and operational performance
NNPC’s 2025 results provide another dimension to the argument. The company’s financial statements reported that Profit After Tax increased from N5.4 trillion in 2024 to N7.2 trillion in 2025, while operating cash flow rose by 16 per cent.
Crude oil and condensate production reached a five-year high of 1.77 million barrels per day. Major crude evacuation pipelines had achieved improved availability, with its Group Chief Executive Officer, Bayo Ojulari, attributing the improvement partly to community-based surveillance, government intervention and the involvement of security agencies.
These figures are relevant because the security of petroleum infrastructure has direct implications for production, evacuation, revenue generation and foreign exchange earnings. It would therefore be misleading to portray the entire pipeline protection programme as an unproductive exercise without examining its operational outcomes. But this must be distinctly stated.
Contradiction 5: The N8.25 trillion forward crude-sale liability
A further potential source of confusion in interpreting NNPC’s 2025 accounts is its forward crude-sale obligations.
The financial statements recorded total contract liabilities of approximately N8.69 trillion, with about N8.25 trillion attributable to forward crude-sale arrangements.
These liabilities relate principally to crude oil already committed under financing and prepayment arrangements, for which NNPC has outstanding future delivery obligations. They are not pipeline surveillance payments.
Akannor emphasised that this distinction is important because the balance sheet contains several large financial obligations and receivables arising from different commercial and government transactions.
Putting them together under the label of pipeline surveillance would confuse:
Money owed to NNPC by the Federation.
Money received in advance for future crude oil deliveries.
Operating expenses incurred in protecting petroleum assets.
Actual payments to contractors providing security services.
These are different accounting categories with different economic implications.
The N11.2 trillion receivable and the N8.25 trillion forward-sale liability cannot be treated as evidence of one enormous surveillance contract. They describe different transactions, different counterparties and different obligations.
There is an important point that should not be overlooked: the N11.201 trillion figure is a real accounting balance. It should not be dismissed as imaginary or fabricated. What is questionable is the attempt to present the entire balance as the value of a single pipeline surveillance contract.
Indeed, the Alliance for Economic Research and Ethics (AERE), in its examination of the accounts, called for a more detailed breakdown of the Federation receivables, including the amounts attributable to physical security expenditure, advances and other obligations – as a way of clearing this confusion.
Challenging the misrepresentation of the N11.2 trillion figure should not mean dismissing legitimate demands for accountability, procurement transparency or independent verification of contractors’ performance.
The strongest professional argument is not that NNPC should be exempted from scrutiny, but that scrutiny must begin with an accurate interpretation of its accounts.
Sam Diala is a Bloomberg Certified Financial Journalist with over a decade of experience in reporting Business and Economy. He is Business Editor at THEWILL Newspaper, and believes that work, not wishes, creates wealth.