Nigerian Transparency Group Struggles To Rein In Oil Corruption
International Business Times
Published Aug 29, 2014 11:43AM ET
Nigerian Transparency Group Struggles To Rein In Oil Corruption
By Maria Gallucci - Attempts to rein in corruption in Nigeria’s oil sector are reportedly falling short. The head of a government-run transparency initiative says officials have largely ignored his fact-finding reports and made it difficult for his organization to effectively police Africa’s biggest oil industry, Bloomberg News reported on Friday.
“Those who are benefiting from this forgery called Nigeria will like to keep it at all costs,” Ledum Mitee, a lawyer and former activist, told the news agency from Abuja, the capital. “All these people pilfering from the country are in bed together.”
A spokesman for President Goodluck Jonathan did not return Bloomberg’s repeated requests for comments, the news agency said.
Oil and gas exports account for close to 80 percent of government revenue in Nigeria. Allegations of missing oil funds date back to the 1970s, during the infancy of the state-owned Nigerian National Petroleum Corporation (NPPC). In the 1990s, an official investigation found that $12 billion in oil revenue was unaccounted for under the government of military ruler Ibrahim Babandgida, Bloomberg noted.
Nigeria set up its Extractive Industries Transparency Initiative (NEITI) in 2004 after the government agreed to comply with international standards that require oil and mining companies and governments to publish all payments. Seven years ago, Nigeria passed a law that allows NEITI to collect and analyze payment data from all energy companies operating in the country, including Royal Dutch Shell PLC (NYSE:RDS.A), Exxon Mobil Corp. NYSE:XOM, Chevron Corp. NYSE:CVX, and Italy’s Eni SpA BIT:ENI.
Shell said this week it was selling its Nigerian assets -- worth up to $5.2 billion -- over concerns of theft and corruption in the Niger Delta region. Last February, the oil giant said it was forced to shut down one of its pipelines after thieves drilled holes through it. Eni and the French company Total SA NYSE:TOT are also selling some of their shares in Nigerian oil infrastructure assets.
NEITI has audited oil and gas industry payments made from 1999 to 2011 and is now examining 2012 to 2013 oil industry payments and revenue, Mitee told Bloomberg. The latest audit report, which looked at 2009 to 2011, found that at least $23.2 billion of oil income wasn’t deposited into the national accounts operated by the central bank and NNPC at JP Morgan Chase & Co. in New York, Bloomberg noted.
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Mitee complained that his organization is only equipped to review old files for hints of past corruption. He said that NEITI should be allowed to monitor the oil industry in real time, including by installing meters at pipeline wellheads, which would indicate whether and where crude oil went missing on its way to the export terminal.
The chairman added that Nigerian lawmakers should advance a proposed Petroleum Industry Bill, which has been stuck in parliament for six years due to political wrangling with global oil companies over proposed tax and royalty terms, Bloomberg said. The measure would also help clear up NNPC’s confusing role as industry regulator and national oil company, Mitee told the news agency.
Written By: International Business Times
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