NEITI embraces NNPC restructuring, offers to help recover $11.6bn NLNG dividend

Written by on August 17, 2015

The Nigerian Extractive Industries Transparency Initiative (NEITI) on Sunday threw its full weight behind President Muhammadu Buhari’s reforms in the oil and gas industry, which commenced a fortnight ago with the massive restructuring of the Nigerian National Petroleum Corporation’s top management and administrative organs.

download (3)

Expressing optimism at the courageous steps taken so far by the President, NEITI said the measures are consistent with the findings and recommendations of its various Independent Audit Reports, which were ignored by previous administrations.

“As an agency set up by law to implement the global principles of Extractive Industries Transparency Initiative (EITI), to which Nigeria is a signatory, NEITI has a legitimate interest in the on-going sweeping reforms,” the agency said through its Director of Communications, Ogbonnaya Orji.

Noting that President Buhari has so far demonstrated the political will to implement its recommended reforms, NEITI applauded the recent appointment of Emmanuel Kachikwu as Group Managing Director of NNPC, describing him as “a renowned industry expert with the needed global exposure, competence and integrity.”

NEITI expressed the hope that Mr. Kachikwu and his new management team would study its findings and recommendations outlined in the various independent reports on the sector with a view to implementing pending remedial issues under a plan developed in partnership with the Inter Ministerial Task Team (IMTT)

Some of the key recommendations ignored by previous administrations include the issue of inadequate metering infrastructure for accurate measurement of crude oil; the Joint venture cash call regime; inefficient determination of production cost, and urgent resolution and review of pricing issues related to expired Memorandum of Understanding (MoUs) as well as legal agreements with oil companies with huge revenue loss implications for the nation.

Others include huge costs of fuel subsidy; crude oil swap and products exchange agreements; repair of the refineries;  oil theft;  review of existing fiscal regimes in the industry;  automation of record keeping processes, and the politics of acquisition and discretionary assignments of oil blocks.

Pledging its readiness and willingness to provide further details on these recommendations, NEITI said it felt particularly encouraged by the NNPC boss’ declaration that henceforth all dividends by the Nigeria Liquefied Natural Gas (NLNG) would be remitted directly to the Federation account as required by law.

“Implementing this remedial issue alone, a total of $11.6 billion dollars disclosed by NEITI as paid by NLNG to NNPC, but not remitted by the NNPC to the Federation account, could be recovered into government coffers,” NEITI said.

“We in NEITI are ready to offer any advice, support, partnership and cooperation based on mutual respect to the new NNPC that is emerging under the leadership of Dr. Ibe Kachikwu to ensure that the NNPC conforms fully to the requirements of transparency and accountability as enshrined in the NEITI act of 2007 and the principles of the global EITI,” the statement said.

On reforms, NEITI commended the President’s recent directive on operation of a single treasury account system, saying over 70 percent of the funds involved are directly or indirectly generated from extractive industries.

It also identified with the Adams Oshiomhole-led National Economic Council (NEC) ad hoc committee mandated to investigate revenue in and out of the Federation account.

“We find the single treasure account policy a vital move and a major reform-driven decision that would help eliminate fraudulent practices created by multiple revenue accounts by government agencies,” it stated.

Similarly, NEITI also embraced the Itsay Sagay-led Presidential Committee on Anti-Corruption, saying its work was not only timely, but very useful.

The committee, the transparency agency said, would serve as a veritable platform to liaise with all the 21 anti-corruption agencies co-ordinated by the Technical Unit on Governance and Anti-Corruption (TUGAR) under the NEITI Chairman to share information as well as offer advice based on experiences over the years.

The agency also offered to work with the Committee to see how government would be able to recover over $7 billion debt by oil companies, as captured in NEITI audit reports which identified cases of under payments and under assessments arising from subjective interpretation of MoUs and the country’s tax laws.

It urged the President to ensure that the ongoing reforms were extended to the mining and solid minerals sector, pointing out that NEITI’s scoping study and independent audit reports have revealed huge potentials for more revenues for the country than oil.

Specifically, NEITI emphasized the need to check the activities of illegal miners, many of whom are foreigners who have taken over the solid minerals sector without authorization.


Reader's opinions

Leave a Reply

Current track