Need For NEITI To Monitor Flow Of Oil And Gas In Nigeria

By Chigozie Uzosike
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In continuation of the NEITI-CSSC work on oil and gas remediation issues from the NEITI audit (1999-2012), the World Bank in collaboration with the Nigeria Extractive Industries Transparency Initiative (N.E1T.I) held a capacity building workshop for the NEITI Civil Society Steering Committee in Abuja.

The workshop which was aimed at capacity building of CSSC members to strengthen their participation in NEIT1 process, NEITI audit remediation issues on oil/gas sector, attracted Civil Society Organizations (drawn from media, women groups, professional groups, academia, labour, youth groups, PWYP, Host communities, etc) from the six geo-political zones in Nigeria, who are working on issues of transparency, accountability and due process in the management of extractive industries in Nigeria.

The training featured several presentations on: Introduction to oil and gas industry in Nigeria; Understanding NEITI oil and gas audit report; Exposure to simplified 2012 NEITI oil and gas audit report; NEITI remediation status update; Trend analysis and interpretation of N'EITI oil and gas audit reports (1999-2012). Other presentations at the workshop include: Understanding remediation issues in the NEITI oil and gas report; and enhancing stakeholder's capacity skills on advocacy.

After extensive deliberations on the stale of affairs in the oil and gas sector, and in line with Mr, President's invitation to civil society in his inaugural speech to support, understand and cooperate with him in his intention to reform (he petroleum sector, the workshop rose with the following resolutions.

Nigerian government should divest its shares in Joint Ventures of Nigerian National Petroleum Corporation and other oil and gas investment in preference to more profitable Production Sharing Contract, to provide better foundation for efficient and profitable management of Nigeria oil and gas sector. This divestment should be phased to encourage participation and accountability. Fan of the proceeds from divestment should be strategically channeled to the development of infrastructure, agriculture, power, transport, solid minerals,, education and health sectors while the remaining should be reserved for future generation.

That corruption, of massive proportion, in the oil arid gas sector, particularly the petroleum subsidy regime and all oil and gas audit remediation issues, should be urgently and thoroughly investigated and addressed. We also call on all the NEITI Inter-Ministerial Task Team (IMTT) members to show more commitment in addressing all remediation issues especially the unremitted S11.6bn. Liquefied Natural Gas dividends by NNPC.

That the daily allocations of 445,000 barrels of crude oil to NNPC should be reviewed downwards in view of the fact that the (bur refineries operate around 20 percent capacity utilization. The allocation of crude oil beyond the refineries capacity to refine constitutes huge economic loss. Government should open up the downstream sector to attract private sector participation in investment. Meanwhile, Government should return all refineries to their optimum capacity and efficiency.

On the issue PIB, CSOs are concerned that after eight years of legislative efforts to pass the bill into law and alter incurring billions of naira, the bill has not been passed. We therefore call on President Muhammadu Buhari and the 8th National Assembly to demonstrate their patriotism and political will to promote transparency and accountability in the oil and gas sector by ensuring that the bill is passed and signed into law within the first 100 days of the life of this administration, to set a solid legal foundation for the new transparent fiscal arid operational regimes of Nigeria oil and gas sector.

'That CSOs request the President to begin the implementation of remediation issues in line with his campaign promises. It was noted that the non-implementation of remediation issues, Nigeria risks being delisted by EIT.I in. January 2016.

That the idea of ‘pioneer status and certification." as an incentive policy to new businesses should be reviewed in the divestment of already producing OMLs, to curb the present: abuse in the oil and gas sector which, results in. revenue losses to Nigeria.

That the opaque and discretionary process of awarding oil blocks as currently being practiced by the Federal Government should be discouraged and made to go through normal process which was discontinued since 2007. The principle of discretionary award of oil blocks contradicts the principle of due process, transparency and competition.

The non adherence to these principles has resulted in loss in huge revenues to the Federation, and denies Nigerians value from natural resources. That Department of Petroleum Resources should as a matter of urgency develop and enforce a regulatory framework for the installation of uniform metering system at all oil well heads in Nigeria.

That Mr. President should immediately direct NEITI to conduct the Fiscal Allocation and Statutory Disbursement (FASD) audit in all the 36 states and 774 LGAs. This audit will reveal how states and LGAs are spending their allocation from Oil and Gas sector.

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