Oil firms, agencies more transparent in last four years — NEITI

Compliance by oil companies and government agencies covered under the oil and gas industry audit process to requests for information and other queries has improved to 68 percent from last year, the Nigeria Extractive Industries Transparency Initiative (NEITI) has said.

However, the agency in charge of monitoring transparency and accountability in the extractive industries said a comparative analysis of the compliance levels between 2015 and 2019 showed an improvement of over 200 per cent.

NEITI audit process

To enable it to conduct the annual audit of the operations and activities of the covered entities in the country’s oil and gas industry, NEITI usually sends out questionnaires for the affected companies and agencies to respond to by providing information and data concerning all aspects of their operations.

Such information usually covers information by the oil and gas companies on the tax and other revenues paid to the government for the year, or by the government covered entities on the amount of such tax or revenues received from the oil and gas companies.

Over the years, responses to such requests through the completion of the information template by the companies and government agencies have been poor.

Often, most companies do not even bother to respond to them, thus frustrating NEITI’s attempt to publish the annual audit reports for the industry.

2019 NEITI audit

However, NEITI’s 2019 oil and gas industry audit report noted a significant improvement in the compliance level by the companies and agencies in their submission of the audit templates used for data gathering for the audit.

The executive secretary of NEITI, Waziri Adio, noted in the latest compliance assessment report released in Abuja, that despite the challenges posed by the COVID-19 pandemic, the companies and the covered entities’ response rose to about 68 percent during the year.

“The data submission compliance rate for the 2019 oil and gas audit exercise is very impressive,” Mr. Adio said.

“It is remarkable not just because of the massive improvement across the board, but also because this improved compliance happened with all the restrictions imposed by COVID-19.

“This underscores the strong commitment of the affected companies and the government agencies. We commend them and urge them to keep it up,” he added.

The NEITI scribe said the assessment examined the level of compliance by entities to the data gathering component of the audit process, with a focus on template timeliness and completeness.

While timeliness looked at the submission of the information templates within the agreed deadline, he said completeness focused on the submission of all information and data applicable to each entity.

Compliance highlights

Highlights of the compliance report showed that 49 entities, representing 68 percent of the 72 covered entities, attained the maximum score of 100 percent.

Also, the report showed that only one entity scored 95 percent, while another scored 93 percent, with four entities scoring 88 percent; two entities each scoring 75 and 50 percent.

Further analysis of the report showed that out of the 72 entities covered by the assessment exercise, 58 entities, or 81 percent, scored between 75 percent and above, while 66, or 92 percent scored between 50 percent and above.

The assessment evaluated participating companies and government agencies on a scale of zero to 100 percent using the two indicators mentioned above.

While zero showed total non-compliance with the data collection process for the audit exercise, 100 percent indicated total compliance.

NEITI’s first compliance exercise focusing on the 2015 oil and gas industry audit cycle was published in August 2017.

A comparative analysis of the assessment scores for the 2015 and 2019 oil and gas data submission exercise showed improved compliance among covered entities.

“In 2019, 49 entities (out of 72) scored 100 percent in the compliance assessment, while 14 entities (out of 65) scored 100 percent in 2015. Thus, 68 percent of the covered entities fully complied in 2019, while 21.54 percent fully complied in 2015,” the report said.

Further breakdown of the scores showed that nine entities retained their 2015 compliance scores of 100 percent in 2019, while three entities moved from zero in 2015 to 100 percent in 2019.

The report also revealed that 14 entities recorded a drop in their compliance scores, the biggest dropping from 88 percent in 2015 to zero in 2019.

NEITI did not reveal the names of the affected companies or agencies.

Mr Adio reiterated the commitment of NEITI to keep its plan to release the 2019 report this year, saying the data gathering, data validation and reconciliation stages of the exercise have been concluded.