By Yemie Adeoye

The Nigerian Extractive Industries Transparency Initiative, NEITI, has concluded plans to probe the downstream sector of the petroleum industry.

The decision followed the corruption unraveled in the sector as a result of the Petroleum Subsidy Fund, PSF, which was reportedly abused by several operators in connivance with some government agencies.

NEITI, which is probing the downstream for the first time, also expressed the hope that the move will rekindle investors’ confidence in the nation’s oil and gas sector, in order to open up the industry for competition, foreign direct investment as well as international standard corporate governance.

The agency also said that the move is aimed at boosting revenue flows for the federal government. In this regard, NEITI organised a two-day special workshop in Lagos, on “Understanding audit template,” aimed at introducing the auditors to the stakeholders in the sector.

The workshop was also meant to showcase the audit template to all concerned in the spirit of transparency so that everyone would be aware of the audit process and no one would be caught unaware or embarrassed when the auditors makes request of them.

Speaking at the opening of the workshop, the Executive Secretary of NEITI, Mrs. Zainab Ahmed, noted that since its inception in 2003, NEITI has carried out audit processes in the oil and gas sector for the periods 1999-2004, 2005, and most recently, 2006 to 2008 respectively.

“Hence the process we are about to explain in this workshop is not entirely new to most of the companies represented here. But we in NEITI are aware that in all of the previous audits, none, perhaps, will attract the kind of attention and public interest than the one we are set to commence.

“This is as a result of recent and on-going developments in the sector, which has led to increasing public suspicion and allegations of corruption in the sector.”

She recalled that at a recent national conference, one of the recurring issues that came up was “the need for NEITI to bring up its audit process as required by law, and in response to this national expectations, two indigenous and reputable audit firms have been engaged to carry out the audit of the mineral sector and the oil and gas industry from the period 2007 to 2010, and 2009 to 2011, respectively.”

Ahmed said the importance of these projects can be found in their relevance to providing relevant current and reliable information and data on the amount of money that companies paid to government as tax, royalties, levies, bonuses etc during the particular period under review.

She explained that the exercise would also provide information to the public on what government received and what it was expected to receive.

“The audit would also establish remittances of the funds accruing from the sector to the Federation Account as at when due. We are certain that the comprehensive audit of the sector at this time of ongoing national debate on transparency and accountability in the management of revenues in the oil and gas sector is a timely, critical and sensitive national project.”

She explained that for these reasons, a Nigerian firm, Sada Idris and Co, have been engaged while Haruna Yaha and Co, are to conduct the audit for the solid minerals sector.

“The project about to commence is unique in many respects as it is the first time NEITI will be expanding the audit to cover fully the downstream sector of the oil industry.”

It would be recalled that NEITI was inaugurated in February 2004, by former President Olusegun Obasanjo, when he set up the National Stakeholders Working Group, NSWG, under the leadership of Mrs. Obiageli Ezekwesili.