11 August 2017, Sweetcrude, Lagos – The Nigerian Resource Governance Institute (NRGI), has said that the weakest link in Nigeria’s oil and gas value realisation component, is licensing.
The Institute made this known in its published 2017 Resource Governance Index.
The index measures the quality of resource governance in 81 countries that together produce 82 percent of the world’s oil, 78 percent of its gas and a significant proportion of minerals, including 72 percent of all copper.
The index scored Nigeria’s licensing process 17 out of 100, placing it among 89 country licensing assessments.
“This score and ranking reflect high levels of opacity in key areas of decision-making, including qualification of companies, process rules and disclosure of terms. The Nigerian government does not regularly publicly disclose government socials, financial interests in the extractive sector or the identities of beneficial owners of extractive companies, though it has made some early commitments to do so with the Extractive Industries Transparency Initiative (EITI) and the Open Government Partnership (OGP). The government has committed to disclosing all oil, gas and mining contracts in its “seven big wins” policy strategy and as part of its OGP action plan, but thus far, it has not disclosed contracts”, it said.
The index also flawed the government’s revenue collection transparency.
“Despite some progress in transparency of revenue collection over the past five years, tracking payments from oil and gas companies remains challenging”, it said.
According to Nigeria’s 2014 EITI data, just over half of public revenues from oil and gas were distributed to the federal government and the rest were shared between the state and local governments.
In terms of revenue sharing, Nigeria ranks 11th, alongside the United States (Gulf of Mexico) and Ecuador.
“The public lacks access to audited information on revenue flows to lower levels of government, and this contributes to the gap between the quality of the legal framework and actual implementation”, it said.