BREAKING NEWS, Oil & Gas
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The Nigeria Extractive Industries Transparency Initiative says that confidence is returning in the oil and gas sector because of the current restructuring at the Nigerian National Petroleum Sector
| By Anayo Ezugwu | Sep 7, 2015 @ 01:00 GMT |
THE ongoing restructuring of the Nigerian National Petroleum Corporation, NNPC, is raising hope of a new lease of life in the oil and gas sector. According to the Nigeria Extractive Industries Transparency Initiative, NEITI, the swift changes being made by the new management of the NNPC is restoring the confidence that the federal government will initiate far-reaching reform in the Nigeria’s oil and gas sector. NEITI said that so far, the decision of President Muhammadu Buhari to restructure the management organ of NNPC, starting with the top cadre of the corporation was suggestive of a strong political will to change the latent mode of operations in the country’s hydrocarbon industry.
These measures were consistent with findings and recommendations in several of NEITI’s independent audit report of activities in the oil sector, adding that these reports were ignored by previous governments.
A statement by Orji Ogbonnanya Orji, director of communication, NEITI, said the agency was encouraged that the measures taken so far largely inspire hope and confidence. He said, “The measures are also consistent with the findings and recommendations of NEITI in its various independent audit reports. These reports were ignored in the past.”
NEITI noted that it has a legitimate interest in the ongoing sweeping reform as an agency set up by law to implement the global principles of the Extractive Industries Transparency Initiative, EITI, which Nigeria is a signatory, hence, its decision to follow through the process. “We are therefore delighted that the much needed political will required to boldly implement the NEITI recommended reforms is now provided, available and accessible under the leadership of President Muhamadu Buhari,” NEITI stated.
While disclosing its assessment of the changes at the NNPC, NEITI said: “The careful decision made to appoint Ibe Kachikwu as the group managing director of the NNPC, is already evident in the on-going dismantling of the unwieldy structure of the NNPC that made it impossible in the past for the organisation to respond to increasing public demands for reforms.”
It thus called on the new top management of the NNPC to consider prioritising its audit reports on the oil sector. “It is our considered hope that new NNPC group managing director and his new team will consider it a priority to carefully study the findings and recommendations outlined in NEITI independent reports of the sector. This is with a view to implementing the pending remedial issues under a plan already developed by NEITI and the Inter Ministerial Task Team, IMTT,” it said.
NEITI also listed some of the outstanding issues for consideration to include inadequate metering infrastructure to improve on accurate measurement of crude oil and Joint Venture cash call regime. The agency also seeks government’s intervention in the current inefficient cost determination as well as urgent resolution and review of pricing issues related to expired Memorandum of Understandings and legal agreements with oil companies that have huge revenue loss implications for the nation.
Other areas of intervention include huge costs of fuel subsidy; crude oil swap and products exchange agreements; repair of the refineries; oil theft; review of existing fiscal regime in the industry; automation of record keeping and the politics of acquisition and assignments of oil blocks by discretion.
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