Oil
FG Directs Oil Companies to submit to NEITI process
ABUJA – The Federal Government has reinstated its commitment to the implementation of the Extractive Industries Transparency Initiative (EITI) principles as an integral part of the planned reforms in the oil and gas industry in Nigeria.
The Minister of Petroleum Resources, Mrs. Deziani Alison Madueke conveyed the commitment today in Lagos while addressing the closing ceremony of a workshop for companies and government agencies covered by the 2012 NEITI independent audit of the oil and gas industry.
In the words of the Petroleum Minister “my presence at this event testifies to the fact that Ministry of Petroleum Resources, its departments, parastatals and agencies including the NNPC and all its subsidiaries are in full support of the NEITI process and the enthronement of transparency and accountability in the oil and gas industry. We shall provide the required support to NEITI, apply its principles to our operations and support all efforts to uphold its independence, in pursuit of this principle, we will continue to work with NEITI to collectively deal with challenges in the process and in our operations”
Mrs. Madueke stated that it was in the interest of Government, the Ministry of Petroleum Resources and the oil and gas industry for NEITI process to be internalized in the sector and seen as a leading partner in the proposed reforms of the sector.
“Let me at this juncture re-state that one of the cardinal reasons behind President Goodluck Jonathan administration’s strong support for the Petroleum Industry Bill is on the need to enshrine transparency, accountability as pillars of the reforms of the oil and gas industry. The Minister expressed delight that NEITI has made valuable contributions to the Petroleum Industry Bill”.
While appreciating the importance of the workshop, the Minister directed all companies in the oil and gas industry as well as government agencies under the Ministry to take the exercise very seriously.
“Let me once again direct all companies in the oil and gas industry as well as relevant agencies under the Ministry of Petroleum Resources to comply and fully cooperate with the audit through timely provision of information and data required by NEITI. Compliance and cooperation with NEITI in this assignment is mandatory and compulsory”
The Minister commended NEITI for the insightful revelations from its last audit that over $7.8 billion remain outstanding recoverable funds in the hands of companies as a result of either underassessment or underpayments of taxes, royalties, levies, signature bonuses etc.
She described the recovery of these huge sums of money as critical to government. “ I hereby direct the NNPC, the Department of Petroleum Resources (DPR) and all other agencies important in efforts to recover these funds to work closely with NEITI for early recovery and remittances of these funds to the federation account.
The Executive Secretary of NEITI and the Chairman of NEITI Board, Ledum Mitee in their various speeches welcomed the emerging working partnership based on defined roles between the Ministry of Petroleum Resources and NEITI in the implementation of EITI principles in Nigeria.
The Chairman reaffirmed the commitment of the National Stakeholders Working Group (NSWG) to work with government companies and the civil society to enthrone openness and accountability in the Nigeria’s oil and gas industry.
Mr. Ledum Mitee requested the Minister to provide institutional support for NEITI to fully implement the new Extractive Industries Transparency Initiative standards in the industry. The new global standards, he added requires full disclosure of beneficial ownership of oil and gas companies and contract transparency in transactions.
The NEITI 2012 industry audit of the sector covers disclosure of all companies payments reconciled against all government receipts, track financial flows in the industry. Others are to identify discrepancies and map hydrocarbon flows within the period under review.
The exercise also involves amongst others the checking the amount of crude oil exported, sales and utilization of gas, refinery balances, petroleum products importation and distribution. The audit will also check coastal liftings, subsidy payments, hydrocarbon products balances, gross volumes of oil and gas produced from various fields, crude liftings from the terminals etc. The findings of the industry audit are expected to be made public within nine months.
In a strategic move to revitalize Nigeria’s oil and gas sector, the Federal Government has unveiled two key fiscal incentives aimed at attracting investment and enhancing energy security.
The announcement was made by Mr. Wale Edun, the Minister of Finance and Coordinating Minister of the Economy on Wednesday.
The first initiative, the Value Added Tax (VAT) Modification Order 2024, introduces critical exemptions for essential energy products and infrastructure, including Diesel, Feed Gas, Liquefied Petroleum Gas (LPG), Compressed Natural Gas (CNG), Electric Vehicles, Liquefied Natural Gas (LNG) infrastructure, and Clean Cooking Equipment.
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These exemptions are designed to reduce living costs for Nigerians, promote energy security, and accelerate the transition to cleaner energy alternatives.
The second initiative, the Notice of Tax Incentives for Deep Offshore Oil & Gas Production, offers new tax relief options for deep offshore exploration projects.
This measure aims to position Nigeria’s deep offshore basin as a premier destination for international oil and gas investments, boosting the country’s appeal to foreign investors.
These reforms are part of a broader set of policy initiatives, known as Policy Directives 40-42, endorsed by President Bola Ahmed Tinubu.
The directives reflect the administration’s commitment to fostering sustainable development in the energy sector and enhancing Nigeria’s competitive edge in the global oil and gas market.
By Yemie Adeoye
NIGERIA’s President Bola Tinubu has announced that the protracted ExxonMobil-Seplat upstream oil divestment will be formally approved by the Minister of petroleum within a matter of days, just as he announced his government’s intention to expand the Compress natural Gas, CNG buses initiative.
The President who stated this during his Independence day nationwide broadcast stated that the move is in line with his administration’s commitment to free enterprise, free entry and free exit in investments which is the hallmark of his administration investment policy.
“Fellow compatriots, our administration is committed to free enterprise, free entry, and free exit in investments while maintaining the sanctity and efficacy of our regulatory processes. This principle guides the divestment transactions in our upstream petroleum sector, where we are committed to changing the fortune positively. As such, the ExxonMobil Seplat divestment will receive ministerial approval in a matter of days, having been concluded by the regulator, NUPRC, in line with the Petroleum Industry Act, PIA. This was done in the same manner as other qualified divestments approved in the sector.”
The President also seized the opportunity to plead with Nigerians to be patient with his administration’s reform policies. “As your President, I assure you that we are committed to finding sustainable solutions to alleviate the suffering of our citizens. Once again, I plead for your patience as the reforms we are implementing show positive signs, and we are beginning to see light at the end of the tunnel”.
“Our energy transition programme is on course. We are expanding the adoption of the Presidential Initiative on Compressed Natural Gas for mass transit with private sector players. The Federal Government is ready to assist the thirty-six States and FCT in acquiring CNG buses for cheaper public transportation.
Fellow Nigerians, while we are working to stabilise the economy and secure the country, we also seek to foster national unity and build social harmony and cohesion. Our economy can only thrive when there is peace”. he enthused.
As part of the administration’s push to improve Ease of Doing Business (EoDB), Nigeria’s Vice President Kashim Shettima has expressed support for ExxonMobil’s plan to invest $10 billion in the country’s deep-water oil sector.
Speaking on Wednesday, September 25, 2024, during a meeting with ExxonMobil executives at the 79th United Nations General Assembly (UNGA) in New York, Shettima called the investment “a clear testament to the administration’s economic reforms and investor-friendly policies.”
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This announcement follows news that international maritime company DP World intends to develop a multibillion-dollar port project in Nigeria.
Stanley Nkwocha, Senior Special Assistant to the President on Media and Communications, shared the development in a statement on Wednesday. He quoted Shettima as saying: “ExxonMobil’s potential investment aligns with the vision of President Bola Ahmed Tinubu’s administration for a more investment-friendly Nigeria.
We are committed to fostering an environment that supports such transformative projects.”Shettima also discussed the administration’s broader efforts to improve the ease of doing business, highlighting the “Renewed Hope Agenda,” which aims to simplify bureaucratic processes, enhance transparency, and offer fiscal incentives to attract global investors.
“Our administration has taken bold steps to unify the exchange rate, remove fuel subsidies, and implement tax reforms. These measures, though challenging in the short term, are intended to create a stable and predictable business environment in the long term,” he added.
On the oil and gas sector, Shettima mentioned that the government is revising the fiscal framework for deep-water operations to attract investment while ensuring fair returns for the Nigerian people.
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