A Review of the Nigerian Energy Industry

NEITI insists on transparency in acquisition, awards of OMLs

Zainab10 September 2013, Abuja – The Nigeria Extractive Industries Transparency Initiative, NEITI, has stressed the importance of transparency in the acquisition and awards of crude oil prospecting licences and mining leases in Nigeria’s hydrocarbon industry.

NEITI in this regard asked the Department of Petroleum Resources, DPR, to follow extant international practices and place all crude oil licenses and contracts in the public domain to allow for public scrutiny and accountability.

Executive Secretary of NEITI, Mrs. Zainab Ahmed, said at an appraisal workshop for awardees of oil prospecting licences organised by DPR that contract transparency in crude oil mining leases guarantees competitiveness unlike the current practices adopted by DPR.

Ahmed, who spoke through NEITI’s Team Leader Outreach, Mrs. Obiageli Onuorah, noted the absence of transparency in the acquisition and awards of oil prospecting licences, OPLs, oil mining leases, OMLs, financing mechanisms, inappropriate disclosures of oil and gas production figures and revenues have characterised Nigeria’s extractive sector.

While requesting the DPR to conform with global standards in award of crude oil mining leases, Ahmed said: “As you may be aware, during the recently concluded global conference of EITI in Australia, the global body formulated new standards. Publishing contracts helps citizens evaluate which benefits and protections their countries receive in exchange for access to publicly owned natural resources.”

She explained that contract transparency also helped citizens monitor whether companies and government live up to their obligations as contained in the agreements, adding that making bidding processes transparent and competitive would ensure the right people with the requisite expertise get operational licenses.

Ahmed also underscored the importance of adherence to due process, transparency and accountability in the management of extractive resource wealth, which has become a global order.

Citing various global initiatives in this direction, she pointed out that there was a coordinated international response against corruption and impunity in the management of revenues accruing from the extractive sector.

She therefore reiterated the need for the installation of dependable metering infrastructure to guarantee accurate measurement of crude oil produced at extraction and distribution points as practiced in other oil producing countries of the world.

“This would guarantee accurate reporting of Nigeria’s crude oil production levels and earnings or losses from the sector,” Ahmed noted.

– This Day

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