The Nigeria Extractive Industries Transparency Initiative, NEITI, has opened the process for a comprehensive independent audit of the Nigerian oil and gas sector for 2015 and 2016.
The Executive Secretary of NEITI, Waziri Adio, disclosed this in Lagos at a workshop for major oil companies and relevant government agencies expected to participate in the exercise.
Mr. Adio said the independent audit exercise would be conducted in line with the principles and standards of the global Extractive Industries Transparency Initiative, EITI.
He said the workshop was packaged to acquaint the participants with the structure and content of the auditing template, particularly the kinds of questions NEITI would ask and the answers expected from the covered entities.
The workshop, which featured presentations on the EITI processes, methods, principles and standards, also covered emerging issues on beneficial ownership, contract transparency and benefits of implementing EITI in Nigeria.
“This workshop is to seek your views, suggestions and inputs as well as listen to your concerns on how to make the exercise hitch-free,” Mr. Adio said.
The Executive Secretary announced that NEITI would introduce a ranking reward system to provide incentives for participation by covered entities.
Under the ranking system, Mr. Adio said, companies would be graded based on their efficiency in populating the audit templates, including the quality and depth of information and data provided, quick response to set deadlines, among other considerations.
He further explained that the ranking system would be shared with over 51 member countries of the global EITI and multi-lateral organisations to serve as reference points on adherence to business ethics for major investment decisions in Nigeria.
“NEITI is committed to working closely with the companies under the EITI framework to create good business environment conducive for the inflow of more foreign direct investments into the extractive sector. For this to happen, we encourage all companies to embrace transparency, accountability and corporate governance in conformity with the EITI standards,” he said.
Mr. Adio, however, warned that the transparency agency would not hesitate to invoke relevant sanctions under the law on companies and other covered entities that fail to cooperate during the exercise.
Representatives of all the major international oil and gas companies operating in Nigeria, including Shell, ExxonMobil, Chevron, Agip, Total and were at the workshop. Also in attendance were relevant government agencies such as the NNPC, the FIRS, DPR, NDDC, NLNG etc. The event was also attended by a cross section of the media and the civil society.
While reviewing the templates, the representatives of the respective companies welcomed the objective of the workshop, describing it as a fundamental step in building partnerships and trust with NEITI in the execution of its mandate.
They urged NEITI to note their observations and the issues raised at the workshop, to ensure the reviewed template suited the peculiar operations of the diverse covered entities slated to participate in the process.
The NEITI spokesperson, Ogbonnaya Orji, said the agency had already commenced distribution of the templates to participating companies and government agencies.
He said all populated templates with the required information and data were expected to be returned to NEITI on or before May 31, 2017.
“NEITI is expected to conclude the independent audit and make its findings public by the end of the year. The independent audit of the oil and gas sector by NEITI for the period 2015 and 2016 will examine the fiscal, physical and process issues from, within and among the companies and relevant government agencies,” Mr. Orji said.
He said the audit would, therefore, undertake special verification and validation of information and data on the payments made by the companies to government entities as well as government receipts.
Other areas the audit would cover include quantities and volumes of crude produced, balances payable or receivable on certain financial transactions, taxes, royalties on project by project basis, social contributions and investment flows.
“The overall goal is to ascertain if the fiscal, physical and process transactions in the oil and gas sector during the period under review were in line with the transparency and accountability standards as well as the principles of the global extractive industries transparency initiative which NEITI is implementing in Nigeria,” Mr. Orji said.
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