When the Chairman of the Nigeria Extractive Industry Transparency Initiative (NEITI) Professor Assisi Asobie said the nation’s daily oil production records were not captured properly by the two responsible Federal Government’s regulatory agencies, he was very correct. Similarly, the Nigerian National Petroleum Corporation (NNPC) Group General Manager, Public Affairs, Dr Levi Ajuonuma was very correct in his response to NEITI’s allegations, as he insisted that the NNPC have all records of its oil transactions.

Also, the spokesperson for The Department of Petroleum Resources (DPR) Paul Osu was very correct when he reacted that the DPR has been the eye of the nation in the oil and gas industry and would never lack proper records of the sector. However, both the NNPC and DPR failed to add that records of oil transactions at their disposals were cooked-up figures received from ‘whom it may concern’. In addition, the DPR pathetically failed to add that the ‘two eyes’ of the nation in the oil and gas industry completely went blind in the year that ended in zero and had since been calling for a complete transplant for clearer or at least manageable vision to see the level of fraud in the nation’s oil sector. It was an understatement by NEITI to say that both the NNPC and DPR lack enough capacity to monitor daily output by the oil companies, “a situation that has given rise to the existing discrepancies between the quantity of crude oil produced and how much the nation receives as revenue from the resource.” The fact is that both agencies lack the will power to be honest or rather are inherently handicapped by choice to oversee straight forward (transparent) oil business transactions in the country. The extractive transparency people equally have their own chunk of the blame. Though NNPC and DPR lack enough capacity to monitor Nigeria’s oil and gas dealings, the case of NEITI is even more pathetic. The organization was born impotent in matters that concerns dealing with well established cases of fraud and corruption in accounting for oil revenues by the two government agencies amongst others including the Presidency. From obvious indications, NEITI merely parades a very clear vision to see fraud and corruption but it is very blind or rather disabled in ensuring that exposed genuine cases are pushed beyond the pages of newspapers. What has NEITI done since the Hart Grant’s Audit Report that exposed glaring irreconcilable accounting for produced oil as against the revenues received into the government’s coffer from 1999 to 2004 and beyond? What of the conflicting figures in the daily quantities of crude oil purportedly sent to refineries for domestic refining against the actual volume received by the Plant within the same period reviewed? Industry analysts including this author had earlier posited that NEITI as an institution was deliberately structured by to be impotent or rather to only bark without the teeth to bite. Of course how can NEITI bite when everything about the conscription was comfortably embedded into the day to day bureaucracy and funding (largess of the Presidency where the demons causing the problems of the NNPC and DPR are domiciled since the days of Obasanjo- Ezekwesili transparency campaign. It is not enough to cry over the pathetic mismanagement of Nigeria’s oil records and earnings from the sector. NEITI need to be more proactive. What has the organization done since inception to ensure that all the government agencies involved - NNPC, DPR, Office of the Accountant General of the Federation, Central Bank of Nigeria, Revenue Mobilisation, Allocation and Fiscal Commission as well as Federal Inland Revenue Service have a common platform for measuring the amount of oil produced and sold (domestic/export) in the country? The Accountant-General of the Federation, Alhaji Ibrahim Dankwabo in his memorandum to the House of Representatives Public Hearing on Non-Remittance of Revenue by Ministries, Departments and Agencies (MDAs) into the Federation Account, recently highlighted eight gorges from which Federal Government’s fund find their ways into private pockets. Amongst them were insufficient information on activities of the Nigerian National Petroleum Corporation (NNPC) and oil revenues, leakages in tax revenues, differential accounting methods by the Federal Inland Revenue Service (FIRS) and the Central Bank of Nigeria (CBN); leakages in Nigeria Customs Services (NCS) revenues and Federal Government and independent sources. According to him, sufficient information is needed for effective monitoring of revenues derivable from crude oil sales by the NNPC to check the graft in the oil industry. Such information, he maintained, must include the list of oil producing companies in Nigeria, daily output of each firm, the production category of each company (Joint Venture and Production Sharing Contracts (JV and PSC), and the NNPC pricing policy and sensitivity to market trends. The NEITI is waiting to be begged to pick up issues in the established lapses and initiate a focused campaigned for in-house capacity building to appropriately position the two government agencies saddled with the responsibility of supervising and representing Government’s interests in the crucial oil and gas sector. NEITI cannot deliver on this because, as it is currently structured, the organization dines and wines with the culprit in this entire matter- the Presidency. In addition, industry watchers are keenly waiting to see the day NEITI, an European idea (EITI), would raise alarm that named foreign multinational operators- European/American were discovered to have defrauded Nigeria of billions of dollars over improper accounting of actual production output from the plethora of floating production, supply and export or rather bunkering facilities scattered all over the Nigerian near and deep offshore arena. This may never happen because NEITI was packaged to feign aggressive campaign with inbuilt mechanism to avoid even mere mention of the bigger accomplices in the fraud. The real culprits in this hydra –headed improper accounting of produced oil from Nigeria have remained the foreign multinational operators. The people in NNPC and DPR (those working in the country) are mere casual collaborators or rather ignorant accomplices. The informed accomplices in the NNPC system could be found in Hyson and Calson Bermuda, the foreign arms of NNPC’s crude oil sales and petroleum products importation. As was rightly captured by a media report, in the case of Nigeria’s oil production records where one party alone (multinational joint venture partners of the NNPC) possesses full knowledge of almost all the material facts, the law requires that party to show uberrima fides (utmost good faith). He must make full disclosure of all material facts known to him; otherwise the contract may be rescinded. Besides, there is a clear breach of the doctrine of public policy if it is clear, either directly from other circumstances, that the design of one or both of the parties is to defraud the revenue, The report clearly pointed out that, “For a long time, the oil multinationals in Nigeria have practised creative accounting, fortuitously fleecing the country of its vast oil fortunes.” Concerned Nigerians are very curious that banks used in connection with crude oil sales and petroleum products importation (offshore bridging)- both foreign and local have never been mention in all these irreconcilable accounting for oil revenues. It is proper to ask the concerned banks to produce accounting documents for the sales of the government’s share of crude from the joint venture productions, the sale of NNPC excess crude from its daily allocation, and the calculation of petroleum subsidy and the method of computation thereon. This is basically an assignment for NEITI as its mandate falls on accounting transparency in oil revenues- an extractive resource. Nigerians have been told that revenues running into trillions of naira from the excess crude proceeds, signature bonus, waivers and concessions, Nigeria Liquefied Natural Gas (NLNG) dividends, privatisation proceeds, amongst others generated between 2004 and 2007 were allegedly not remitted into the Federation Account. Needless to ask for the identification of the culprit (s) as Nigerians have been told that payments into the Federation Account was the source of a litigation by concerned stakeholders among them eight state governors, who sued the Federal Government at the Supreme Court over what they alleged as “non-remittance into and illegal deductions from the Federation Account from 2004 to 2007. The state governors sought a refund of N546 billion as their entitlements from the national account. The servant leader in his characteristic way of solving genuine cases of fraud and corruption initiated a political solution (to settle out of court) to what was a glaring economic and financial crime. It was not surprising: na the same people-papa deceive pikin (pdp). Can NEITI look into the unholy interference of the Presidency into the accounts of both the NNPC and DPR from 1999-2007? IFEANYI IZEZE IS AN ABUJA-BASED CONSULTANT ON POLITICAL STRATEGY AND GRASSROOT CONSULTATION ([email protected])



The views expressed in this article are the author’s own and do not necessarily reflect the editorial policy of SaharaReporters

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