Audit Data Analytics Instrumental in Detecting Losses in Oil Fields

According to the country’s Auditor General, the Nigerian National Petroleum Corporation (NNPC) held back $16 billionin revenues from the federal government—and they want what they’re owed.


Allegations in the report include: 1) accruals from gas sales to the Nigerian Liquefied Natural Gas (NLNG) were not paid to the Federation Account but were transferred to undisclosed accounts; 2) funds were diverted to the Office of the National Security Adviser rather than to Water Resources for the rehabilitation and construction of dams; and 3) there were no records to verify the millions of dollars spent to purchase hand sanitizers for strategic schools and to subsidize the purchase of fertilizer for agricultural programs.


Auditors have also been busy examining the books of U.S.-based energy companies. According to a recent article by Audimation Services, audit data analytics tools were used to investigate several cases of theft by oil cartels, which were costing the Eagle Ford Shale oilfield tens of millions of dollars.


Al Phillips, an experienced auditor and data analytics user working with EXCO Resources, collected data from 200 wells and compared vehicle run tickets against hourly drops in tank levels. He discovered numerous instances where tank withdrawals did not correspond to run tickets.


The comparison process was not easy and required analysis of several million tank level measurements. To make this possible, Phillips used CaseWare IDEA Data Analysis software to process nine months of data within seconds. He found solid evidence that run tickets were missing and that trucks were illegally removing oil from more than 100 wells. He also uncovered evidence of counterfeit trucks and elaborate money laundering schemes.


In addition to analysis, Phillips was able to use IDEA to create concise and descriptive reports of his analysis that could be shared with law enforcement authorities. In the end, charges were laid for theft of oil from an interstate shipment, wire fraud and money laundering.


According to Phillips, “IDEA was instrumental in analyzing considerable amounts of data quickly to provide evidence used to convict the fraudsters. Our collaboration and the creative use of data analytics had a lasting financial impact.”


Find out exactly how Al Phillips was able to use CaseWare IDEA to identify the theft of oil by cartels. You can also contact us to find how IDEA can help you detect instances of loss, fraud and anomalies. 



About Alain Soublière:

Alain Soublière has many years of experience working with computer audit software. He worked in a senior management role as the IDEA Product Manager for many years before becoming Director of Product strategy for CaseWare Analytics and more recently the Chief Product Strategist.   

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