Oil firms capitalizing on inadequate metering to defraud Nigeria — NEITI

*Shell operated Bonny Oil Terminal.

*Shell operated Bonny Oil Terminal.

22 January 2016, Abuja — The Nigeria Extractive Industries Transparency Initiative, NEITI, yesterday, said it is intensifying efforts to stop international oil companies from defrauding Nigeria of billions of Naira due to inadequate metering facilities at the production and export terminals.

Speaking during a visit of officials of the International Monetary Fund, IMF, to its headquarters, Mr. Ogbonnaya Orji, Acting Executive Secretary of NEITI, lamented that presently royalties are being paid by the international oil companies, IOC, based on computations using lifting volumes instead of production volumes.

Orji stated that several efforts to entrench transparency in the metering process had been met with resistance from the IOCs, hence the decision to collaborate with the Nigerian Academy of Science to fashion out a means to stop the IOCs from shortchanging the country.

He said, “NEITI is working to ensure that the correct estimates of Nigeria’s crude oil lifted is gotten and we will not depend on estimates given by the IOCs.”

He further stated that the funding of the Nigerian National Petroleum Corporation’s, NNPC, Joint Venture (JV) cash call was fraught with a lot of irregularities, adding that due to the delay in the payment, the country is forced to pay higher than usual.

Orji disclosed that NEITI is working with the Nigerian National Petroleum Corporation, NNPC, over the unbundling of the corporation, stating specifically that issues about the unbundling process would be discussed at a meeting between officials of NEITI and the NNPC scheduled for next week.

He explained that Nigerians have come to the realization that prudent management of the country’s resources is key, especially with the huge resources the country had lost to mismanagement over the years.

He added that the country is faced with the reality of diversifying the economy while the government is much more concerned with blocking leakages, stating that these are expected to bring about a lot of policy shifts.

He also stated that Nigeria has been given until the end of February to submit the completed NEITI 2013 audit report, while the country had applied for a six-month grace to enable the Board to be reconstituted, trained and educated on NEITI’s operations.

Furthermore, Orji stated that NEITI is considering expanding its focus to agriculture, forestry and fishing, while it also hopes to increase its scope of engagement with the media and civil societies.

He said the proposed review and expansion of its scope was hinged on the fact that NEITI’s four-year strategic plan is to end in 2016, adding that the review of its strategic plans is expected to commence before the end of the first quarter of 2016.

On the issue of Nigeria’s validation by the international Extractive iIndustries Transparency Initiative, EITI, Orji said, “The EITI is currently reviewing the validation process and modalities following divergent views by multi stakeholders involved in the process. This includes the civil societies, implementing countries and the investors.

“The Civil Society, Investors and supporting countries equally have their separate views on how the validation process should be conducted in order to achieve the desired impact.

In view of this, the EITI has put in place a Committee that is examining these views and interests with a view to harmonizing them.

“We expect the EITI Board to come out with a clear position and modalities at its next meeting slated for Lima, Peru in February, 2016. So Nigeria is not in danger over EITI Validation.”
*Michael Eboh – Vanguard

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