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NEITI indicts oil operators over lack of transparency

By Oscarline Onwuemenyi

Oil Rig Off Shore
Oil Rig Off Shore

ABUJA -THE National Extractive Industries Transparency Initiative has said billions of naira is lost in the nation’s oil and gas industry due to lack of transparency and poor monitoring of oil and gas production in the country.

The Chairman of the National Stakeholders Working Group of NEITI, Professor Assisi Asobie, who disclosed this on Tuesday in an interview with our correspondent, further noted that lack of accountability in the industry was at the root of the crises in the Niger Delta.

Asobie, who spoke at the background of the on Oil and Gas Production Accounting Workshop organized by the Department of Petroleum Resources (DPR) and the Norwegian Petroleum Directorate (NPD), said poor accounting and measurement of oil and gas production was a major challenge to the initiative.

He said, “We have been having problems with knowing exactly how much is produced, so we have commissioned a consultant to help us know the international best practices with regards to production accounting.

“It is so important because if you do not determine how much is lost, those companies that are producing benefit, and Nigeria is cheated. It is in the interest of producers that the status quo is maintained and that the nation never knows how much is lost and who is stealing the product.

“You know wherever, there is anarchy, some people take advantage of the situation, and the way Nigeria’s oil and gas industry is structured today has given so much room for stealing and corruption to go on.

According to him, there is need, therefore, to use the latest electronic technology that can detect where these pipelines are sabotaged, and then capture the images, so that the perpetrators can be apprehended and made to face the wrath of the law.

He said, “Oftentimes, the DPR has complained to us that they cannot do it (effective monitoring and measurement) that is why we got someone from abroad to help us identify these technologies that use sonic systems and then use cameras to capture those behind the theft.

“We know that there are bigger personalities behind all these pipeline sabotage than the so called militants, so it is important that we begin to do things differently to ensure that a few people do not benefit from the wealth that belongs to everyone.”

He added, “What we do in NEITI is to find out how much oil and gas are being produced in Nigeria , and therefore how much royalty and taxes also accrue to the country.

“Part of our responsibility is also to find out the deficiencies in the regulatory agencies like the DPR, and help to remedy those deficiencies; we want to know what challenges they face in determining how much oil is produced and exported from the country.”

On the issue of militancy in the Niger Delta region, Asobie, who is a professor of Political Science, averred that a faulty Federal system and lack of development at the rural level was to blame for the rise in militancy.

He said, “First of all, I think we have moved away from the proper Federation that encouraged subsidiary, which simply means attacking development from the lowest levels of the country.

“In those days when we had regions, those regions had their own separate constitutions, and where able to develop and grow at their own pace; and there was competition which it possible for development to begin from the local government to the federal government.”

Meanwhile, the Minister of State for Petroleum Resources, Mr. Odein Ajumogobia, has said a major challenge in the realization of an effective hydrocarbon accounting system in Nigeria is the issue of pipeline sabotage, leakages and vandalism, security threats and crude oil theft.

He said, “Government is doing its best to curtail these developments through constructive engagement, surveillance, community involvement and the security agencies. In addition, government is reinvigorating the NDDC to effectively improve the socio_economic living conditions of the Niger Delta region.”

Ajumogobia added that government was vigorously pursuing the issue of amnesty and reformation programme for the region’s militants to ensure that peace and harmony prevailed in the Niger Delta.

The minister said a seminar on production accounting was timely “especially at this time that we are reposition the industry and reviewing our strategic approach that will culminate in the reinvigoration and create a more robust system that will boost revenue generation and eliminate uncertainties in the production value chain.”

Similarly, he said, government was committed to ensuring compliance with the NEITI Act of 2007, adding that, “One of the critical challenges facing the oil industry globally is that of an efficient hydrocarbon accounting mechanism.”

He said the country had a hydrocarbon accounting system that is custody transfer-based, which is against the global practice of well head-based accounting system.

“In view of this, the DPR established the National Data Repository (NDR) that will serve as the database of the industry, promoting and maximizing the value of Exploration and Production (E&P) data assets and the sharing of data amongst operators,” he said.

Ajumogobia said the government was also developing the National Production Monitoring System (NPMS) that will help overcome the challenges that the industry is currently facing, by bridging the lapses in the hydrocarbon accounting and to ensure that all production data were received real time in DPR offices through state of art equipment and facilities.

n his own part, the Norwegian Ambassador to Nigeria, Mr. Tore Nedrebo, remarked that how to account correctly and transparently for petroleum production and revenues was extremely important, but also a complicated and sensitive issue.

He said, “We have had projects on metering and accounting in the bilateral cooperation programme on petroleum management between Norway and Nigeria for a number of years, since the MoU was signed in 2000.

“Our goal is to make sure that petroleum revenues contribute to sustainable development and poverty reduction, and do not just end up in the pockets of a rich elite making life worse for the poor,” he said.

Nedrebo further explained that the cooperation evolves at three levels including the level of petroleum directorates, for capacity building regarding resource management, safety and environmental issues.


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