NEITI advocates creation of Transparency index for NNPC

The Nigerian Extractive Industries Transparency Initiative (NEITI) has called for the development of an index by which the Nigerian National Petroleum Corporation (NNPC) could continuously measure its progress in improving its transparency and public accountability.

This was stated in the organisation’s report on the review of NNPC’s monthly financial and operations report released December 21.

“We observe that this index is yet to be developed. We encourage NNPC to intensify efforts in developing this index,” NEITI says.

A transparency index in the view of Alexandra Gillies, analyst at Revenue Watch Institute, an energy sector think tank, should include a publication of a national oil company’s buyer, volume, crude grade, price and date for every cargo of oil sold.

“As with other significant revenue streams, oil sale payments and receipts should be fully disclosed and reconciled under the Extractive Industries Transparency Initiative (EITI), companies should disclose annually the price, volume, grade and date of each cargo that is purchased from a wholly or partially government-owned entity,

“Governments should require commodity traders and other buyers registered or listed in their country to report on payments made to producer country governments. Along with reporting on oil sales, NOCs should disclose how much oil they receive and the amount of all financial transfers to and from the government,” states Gillies.

NEITI also called for the publication of the Audited Annual Report and Accounts as required by NNPC enabling Act.

“We also observe that as at November, this Annual Report is yet to be published. Again, we encourage NNPC to intensify efforts in producing this Annual report” the organisation said.

NEITI also recommended that the NNPC collaborate with IOCs to carry out Value–For-Money Audit on all the Federation’s Joint Ventures with a view to business process improvement on projects execution. Also for a review of existing PSCs to negotiate more favourable terms and improve revenue base to the Federation,”

Waziri Adio, in his comments about the report said: “What NNPC has done with its monthly reports could be termed a sea-change. From being the poster-boy for opacity, NNPC is voluntarily embracing openness and providing near real-time information about the state of play of our oil and gas sector today.”

ISAAC ANYAOGU