A global transparency group, the Extractive Industries Transparency Initiative (EITI), has accepted the Nigerian National Petroleum Corporation (NNPC) as its supporting company.
According to a release on the initiative website, NNPC joined a group of over 65 extractive companies, state-owned enterprises (SOEs), commodity traders, financial institutions, and industry partners who commit to observing the EITI’s supporting company expectations.
Nigeria last year attained top EITI standard in the extractive industries, making it the first Anglophone African country to reach that status.
While welcoming the company’s commitment to the EITI, the board chair, Helen Clark said “NNPC plays a vital role in Nigeria’s economy. Joining the EITI as a supporting company is a welcome step in the NNPC’s journey towards achieving greater transparency and to help ensure that Nigeria’s citizens benefit from their natural resource wealth.”
Also in her remarks, the Minister of Finance, Budget and National Planning and former EITI Board member, Zainab Ahmed, stressed the importance of ensuring that natural resource wealth contributes to sustainable development.
“Increased transparency of Nigeria’s national oil company revenues is contributing to improvements in our country’s domestic resource mobilisation efforts,” she said.
New requirement for NNPC
According to a statement signed by the NNPC spokesperson, Kennie Obateru, the news status demand some steps from the corporation.
NNPC would now publicly declare support for the EITI Principles and, by promoting transparency throughout the extractive industries, help public debate and provide opportunities for sustainable development.
“Publicly disclose taxes and payments; Ensure comprehensive disclosure of taxes and payments made to all EITI implementing countries.
“Publicly disclose beneficial owners and take steps to identify the beneficial owners of direct business partners, including Joint Ventures and contractors.
“Engage in rigorous procurement processes, including due diligence with respect to partners and vendors.
‘Deliver natural resources in a manner that benefits societies and communities, and
“Ensure that company processes are appropriate to deliver the data required for high standards of accountability”.
Established in 1977, NNPC has grown to become the largest asset holder across Nigeria’s oil and gas industry value chain.
Traditionally an oil and gas entity, it is transitioning towards becoming an integrated energy company with an interest in power generation and transmission.
According to the statement, the corporation is taking measures to become more transparent.
“In June 2020, it published audited account for 20 of its subsidiaries. NNPC also publishes its financial and operations report every month on its website, national dailies, and online media to keep the public informed about its activities as part of efforts to be accountable to Nigerians. It is working with Nigeria EITI (NEITI) on an action plan to routinely disclose information and it currently publishes some of the data required by the 2019 EITI Standard on its website,” it said.
These disclosures, it said, demonstrate NNPC’s commitment to its journey to becoming a more transparent national oil company.
Adherence to the EITI supporting company expectations will give further impetus to NNPC’s corporate vision of greater transparency and accountability.
Three areas in which there is scope for advancing transparency are revenues and payments to the government, contracts governing petroleum exploration and production, and consolidated group-level financial statements.
Affirming NNPC’s commitment to the EITI, Group Managing Director, Mele Kyari said “Becoming an EITI supporting company aligns with NNPC’s corporate vision and principles of transparency, accountability and performance excellence. Our partnership with NEITI and EITI strengthens our commitment towards commodity trading transparency, contract transparency, and systematic disclosure of revenues and payments. We are on a journey towards greater transparency and look forward to deepening our collaboration with the EITI to further this work.”
Also, NEITI Executive Secretary, Waziri Adio, commended NNPC’s move to support the EITI.
“NNPC joining the EITI as a supporting company is a major inflection point in the quest for transparency – for the company, for Nigeria’s oil and gas sector, and for the country as a whole. This is so given how critical NNPC is to the sector and to the country. NEITI welcomes this bold commitment. We will continue to work and walk with NNPC to translate its espoused commitments to transparency and accountability into concrete and sustained actions and results.” Mr Adio said.
Becoming an EITI supporting company can help state-owned companies make progress towards transparency.
The statement cited Qatar petroleum as a recent example.
It has been an EITI supporting company since October 2019 and has now published its annual and sustainability plans for the first time.
“EITI’s mission is to promote understanding of natural resource management, strengthen public and corporate governance, and provide the data to inform greater transparency and accountability in the extractives sector.
“By becoming a member of the EITI, 54 countries have committed to disclose information along the extractive industry value chain – from how extraction rights are awarded, to how revenues make their way through the government and how they benefit the public. Through participation in the EITI, countries agree to a common set of rules governing what has to be disclosed and when – the EITI Standard.