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NASS, stakeholders seek transparency, accountability in oil & gas sector

NASS, DSS

By Tom Okpe

To boost the country’s revenue, the National Assembly and other critical stakeholders have called for measures to enhance transparency and accountability in the oil and gas sector.

The stakeholders spoke at the legislative transparency and accountability summit organised by the House of Representatives’ Anti-Corruption Committee, held at Transcorp Hilton Hotel, Abuja on Wednesday.

Ahmad Lawan, president of the Senate, said the engagement was a welcome development in the light of Nigeria’s recent experience in which revenues from oil and gas have been declining because of the lack of transparency in the sector.

Represented by Suleiman Kwari, the chairman, Senate committee on Anti-Corruption and Financial Crimes, Lawan said: “It has become even more worrisome given the place of oil and gas in the nation’s revenue earnings; theft of oil has been alarming, resulting in our inability to meet our production quota and the failure to attain projected revenues, Daily Times gathered.

“To this, are leakages and wastages from improper records at the time of dwindling national resources where funds are required for growth and development.”

Femi Gbajabimila, speaker of the House, said amid evolving paradigms at the global level, the oil and gas industry still faces unique challenges here at home which can be tackled through enhanced transparency and accountability.

Gbajabimila said due to theft and various acts of economic sabotage, Nigeria is experiencing a massive decline in crude oil production and export volume, lamenting that the country is the victim of bad actors determined to achieve great personal wealth at her collective expense.

He said: “At a time of severe financial constraints, perpetrators of this brazen heist threaten our ability to meet the demands of governance and nation-building. Their actions effectively amount to treason against our country, for which they must be held accountable.

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“At the same time, we cannot be ignorant of global trends, and we cannot wish the facts away. And the reality is that the best days of the fossil fuel industry are not ahead; they are long past. There is a coming, and some might say, ongoing shift in the global policy conversation about the economics and regulation of the oil and gas industry.”

Represented by Peter Akpatason, Deputy Majority Leader of the House, the speaker said the summit was particularly important for legislators and policymakers to gain valuable insights into the issues and achieve clarity on the actions they need to take to achieve greater transparency and accountability in the oil and gas industry.

Mele Kyari, Group Chief Executive Officer of the Nigerian National Petroleum Company Limited, said he has been receiving several death threats in the course of tackling oil theft and sharp practices in the sector.

Kyari said the scale of oil theft was enormous with over 200,000 barrels lost at peak of production while 700,000 barrels are recorded as opportunity lost, adding that pipelines have been taken from the company’s main trunk lines to abandon platforms but two have been restored.

“Companies will stop injecting oil into the pipeline the moment they discover it can’t get to the terminal. Therefore at the peak of production, you lose over two hundred thousand barrels per day. But once companies discover this production won’t get to the terminal they will terminate it. So we are losing up to 700,000 barrels of opportunity.

“On terms of stealing we have been able to restore, two of our trunk lines after the discoveries we have made. We were left with no choice than to involve private security contractors and it works, they are complementing our government security agencies and they have done great work. The Navy, Army and etc, everyone has made contributions.”

The NNPC boss said it was important to see a situation where the energy sector becomes completely transparent and accountable, stating the company is making sure that sector’s systems are automated and processes respect policies.

Speaking on agreements with multinational oil companies, Kyari said: “The strength of any agreement is the capacity of active members who negotiate these contracts. Partners do take advantage of their partners, it happens. But there’s a common rule in the oil and gas industry that when you take advantage of your partner, you will come to realize it years later and it pay back at you.”

Making clarifications on fuel subsidy, he said: “It is not possible for you to buy fuel at N165 when your actual cost is far from the value. We need to understand what this subsidy means, today when PMS comes into this country, we transfer to the marketers at N113 for us to realize N165 at the port.

“This is reality so that means whatever is the cost, anything after that value is subsidy so someone has to pay for it. So every difference between N113 and that value is subsidy. Some developed countries are taking out taxes on PMS, that’s another name for subsidy. No matter how they try to put it, it’s subsidy. Countries are doing something to bring down the cost of energy.”

While backing the need for transparency and accountability in the petroleum industry, Ogbonnaya Orji, the executive secretary, Nigeria Extractive Industries Transparency Initiative (NEITI) said between 1999 and 2020, Nigeria has earned $741.74 billion from oil and gas alone while N624 billion has been earned from the solid mineral sector.

“In forum like this should be strengthened with data and that is where NEITI will continue to insist that we work with the National Assembly. The National Assembly needs information on what is paid, what is received and what the money is used for, and NEITI has that data. The challenge we have at the moment is that data is not being properly used,” he stated.

In his presentation, Abdulrasheed Bawa, the chairman of the Economic and Financial Crimes Commission said the anti-graft agency is determined to continue to work closely with stakeholders in the extractive sector to enforce accountability and curb corruption in the oil sector.

Represented by Michael Wetcas, the EFCC head of operations, the chairman said: “We will continue to hold accountable those who breach the public trust in the sector whether they are corporations or individuals, whether local or foreign. The laws enforce by the commission target contravention of legal stipulations on transparency and accountability in both public and private sectors.

“As far as the extractive industry is concerned, the most critical challenge is how to achieve a pro Nigerian meeting of minds on the platform of extant laws and regulations between investors and regulators.

“Throwing transparency and accountability in petroleum industry might seems an arduous task but we believe in the EFCC that whatever we are determined to achieve is doable. Lets us all join hands together to rescue the Nigerian extractive industry from the grips of unscrupulous prayers in the quest of seeing a Nigeria that is free of economic and financial crimes.”

Similarly, Bolaji Owasanoye, the chairman Independent Corrupt Practices Commission (IPC) said the commission serves as secretariat for the inter agency committee on illegal financial flows (IFFs), hence it will tackle such situations in the oil and gas sector.

Owasanoye said deepening transparency in the oil and gas sector will reduce IFFs hereby leading to increased revenue, improved health care, education, improve infrastructure development in Nigeria and lead to better patriotism and nationalism from the citizenry.

“In order to deepen transparency in the Oil and energy sector, I recommend the following conscious and consistent actions:- consistent and transparent audits. Recall that for years NNPC never published an audit of its accounts until this administration.

“The audit recommended is; financial audit, regular physical assets audit, process audit for continuous improvement of process. Review and update of contract negotiation practices. Many of the clauses and agreements that facilitate IFF were consciously ‘negotiated’ by government and NNPC line officers.”

Earlier in his welcome remarks, Nicholas Shehu-Garba, Chairman, House Committee on Anti-Corruption said it is difficult to realise the nation’s potentials in the oil and gas industry if there is lack of transparency and accountability.

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Ihesiulo Grace

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