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Checking Crude Oil Theft

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The Kimberley Process Certification Scheme (simply known as the Kimberley Process or KP) is the outcome of a vigorous campaign launched in 1998 by an international Non-Governmental Organisation, Global Witness, to expose the role of rough diamonds in funding conflicts, especially in Africa.

Following several violations of the sanctions imposed under the United Nations Security Council Resolution 1173 against Jonas Savimbi’s National Union for the Total Independence of Angola (UNITA), Global Witness, in concert with a few other powerful NGOs, was able to pressure diamond-producing countries in the Southern African region into holding a conference in Kimberley, South Africa, in May 2000 to discuss the issue of conflict diamonds.

Coming at the time it did, the deliberations may have also factored in the role of such precious stones in fuelling the fratricidal wars in Liberia and Sierra Leone during which many innocent citizens lost their lives and several others were maimed and abused, all on account of who controlled the huge diamond resources of the two West African neighbours.

After about three years of heated debates and negotiations, the Kimberley convention drafted an international diamond certification scheme which was endorsed and launched as the Kimberley Process by the United Nations in January 2003.

The scheme simply requires a certification of the origin of rough diamonds by participating governments as a way of preventing conflict diamonds from entering the international supply chain. Countries that produce, trade or process uncut diamonds are encouraged to join. They are expected to enact their own laws on how best to implement the scheme while also ensuring that they trade such merchandise with fellow members only.

Although the process has not brought about a complete halt to transactions in conflict diamonds, certainly not with Cote d’Ivoire, Zimbabwe and Venezuela showing little commitment, it has, nevertheless, dealt a significant blow to the flow of such bloody merchandise from conflict zones into the international diamond market. What’s more, it has also helped some of the countries that were, hitherto, hit by diamond-fuelled conflicts to earn more revenue from their official exports of the precious stone.

Nigeria may not be a member of the Kimberley scheme. She is not even a major producer, trader or processor of rough diamonds. Nor is she at war with any rebel group known to be benefitting from such illicit trade. But the country seems to be at war with a different kind of rebels. Crude oil thieves, that is. And in spite of whatever her fighting strategies, she surely needs the type of export-import certification process that Kimberley proposes.

According to Mutiu Sunmonu, managing director of Shell Petroleum Development Company of Nigeria (SPDC), Nigeria loses $5 billion (about N800 billion) annually to illegal oil bunkering in the coastal region of the country.

Speaking at a recent public hearing on oil bunkering organised by the House of Representatives Joint Committee on Petroleum Resources (Upstream) and the Navy, the oil-company chief advised government to form alliances in order to fight the menace which has now gone international.

The United States has also lent its voice in condemning the extent of crude oil theft and environmental degradation in the Niger Delta.

Speaking during the just-concluded US-Nigeria Bi-National Conference in Port Harcourt, the Deputy Assistant Secretary of State for African Affairs, Ms. Cynthia Akuetteh, attributed the rising thievery to low levels of employment and educational opportunities.

The American official was probably referring to the aspect of this robbery that is carried out by a few jobless and highly agitated Niger Delta youths. But it is already common knowledge that there exist some powerful and well-connected syndicates comprising foreign oil firms, top government officials, security operatives and shipping agents which connive with international oil buyers to defraud the nation, often using forged documents. For instance, the Joint Military Task Force (Operation Pulo Shield) raised to protect oil facilities (rather than people) in the region, has recorded several successes at arresting crude oil thieves and local refiners, even as some of its men have also been fingered as being collaborators.

Analysts have recommended that government address the wanton corruption in the petroleum sector through establishing a tougher regulatory framework. And, in addition, there have also been suggestions for the approval of a 10 per cent stake to oil communities, including the checking of pipeline vandalism and illegal refineries through community policing.

Late President Umaru Yar’Adua once likened illegal oil bunkering in the Niger Delta to the trade in blood diamonds during the civil wars in Liberia and Sierra Leone. He was reported to have called for international assistance to help Nigeria stop the trade in what he termed ‘blood oil’.

Indeed, Nigeria needs a coordinated international assistance to tackle this menace, but she has to initiate the move. OPEC is a ready-made platform. And with a clearer US position on the matter, drawing from the Kimberley experience will not be a bad idea, after all.

 

Ibelema Jumbo

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FG Recorded N150.36bn Fiscal Deficit In April   – CBN

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The Federal Government recorded a fiscal deficit of N150.36bn in April, after recording an aggregate expenditure of N559.67bn and retained revenue of N409.31bn.
Figures obtained from the Central Bank of Nigeria’s April report on ‘Fiscal operations of the Federal Government’ revealed at the weekend. 
The report shows that the federal revenue rose by 28.2 per cent in April 2021 to N1.12tn in relation to N862.79bn in March 2021, due to improvement in non-oil earnings. 
It also shows that the provisional aggregate expenditure of the FGN put at N559.67bn was 50.6 per cent below the budget benchmark and 59.4 per cent short of the level in March 2021.
Also, the fiscal operations of the Federal Government in April 2021, according to the report, contracted by 67.8 per cent, relative to the budget estimate.
Part of the report read “Federation revenue rose by 28.2 per cent in April 2021 to N1.12tn, relative to N862.79bn in March 2021, owing to improved non-oil earnings.
“However, the retained revenue of the Federal Government of Nigeria at N409.31bn, was 38.5 per cent below target.
“Similarly, the provisional aggregate expenditure of the FGN, at N559.67bn, was 50.6 per cent below the budget benchmark and 59.4 per cent short of the level in March 2021.
“Consequently, the fiscal operations of the FGN in April 2021 contracted by 67.8 per cent, relative to the budget estimate.”
It added that the FGN debt outstanding, as of the end-March 2021, stood at N28,984.3bn and represented a 15.8 per cent increase, relative to its level in March 2021.

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TSA Promotes Transparency, Accountability In Revenue Collection In Kebbi – Chairman

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Alhaji Iliyasu Arzuka-Jega, Chairman, Kebbi State Board of Internal Revenue, has said that the introduction of Treasury Single Account (TSA) has encouraged accuracy, efficiency and accountability in revenue collection in the state.
Arzuka-Jega stated this at a news conference yesterday in Birnin Kebbi, the Kebbi State capital.
The Tide source reports that TSA is a public accounting system whereby government receipt, revenue and income are collected into one single account.
The Central Bank of Nigeria (CBN) is responsible for the maintenance and management on such account.
It was proposed by the Federal Government in 2012 and fully implemented by the Buhari led-administration.
Arzuka-Jega said that the introduction of digital revenue collection techniques assisted the board towards simplifying its work more convenient and easy.
He said that, “We are now in the era of technology, all our collections have been upgraded from manual to digital.
“In this circumstances, we found it necessary not to be left behind towards ensuring that leakages are blocked and revenues collected enter into government’s coffers.
“All our collections have now been centralised because we operate Single Treasury Account (TSA), where all revenue realised go in there, this has put an end to divertion of fund.”
The Chairman said that the board had recorded significant impact of TSA since inception, as against previous years when revenue collections whether external or internal were done manually.
He said that the manual method of revenue collction was fraught with irregularities which resulted to situation where fund could not be accounted for.
“Now, we do receive payments from Lagos and other states, and we only see evidence of payments made to our platform under the TSA,” he said.

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NNPC Explains 2020 Audited Report

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The Nigerian National Petroleum Corporation (NNPC) has explained the controversial areas of its 2020 audited financial report that placed the corporation on a profit lane.
It would be recalled that on August 26, President Muhammadu Buhari announced a profit after tax of N287billion by the corporation in 2020, the first of its kind in the oil giant’s 44-year history.
This feat, which was commended by Buhari, had also won the Group Managing Director of the corporation,MalamMeleKyari-led management accolades from stakeholders and Nigerians from all walks of life.
Kyari, however, explained how the corporation’s performance turned out positive at a time the negative impact of the Covid-19 pandemic affected businesses worldwide.
Also, the Group Executive Director, Finance & Accounts, Mr Umar Ajiya, also shed more light on the development, and equally addressed some of the issues raised by those who doubt the veracity of the profit declared by the corporation.
He said the trend of real openness has begun not only in the NNPC but also in the Nigerian petroleum industry, especially with the signing of the Petroleum Industry Act (PIA).
Ajiya said that during the period under review, the NNPC took some unprecedented steps among which was cost optimisation aimed at refocusing its businesses.
Also, in the week, the Nigerian Gas Marketing Company Limited (NGMC), a subsidiary of NNPC, restated its commitment to the development of its host communities.
The Managing Director of the company, Mr Justin Ezeala, made the commitment at the opening ceremony of the Women Skills Acquisition Programme for its host communities in its northern operations.
He said NGMC was committed to developing a robust sustainable relationship with all its host communities, and disclosed that the beneficiaries were carefully nominated by executives of their respective communities and would undergo intensive three-week training in catering, tailoring/fashion design, hairdressing and make-up (including pedicure, manicure andgele tying).
He tasked the host communities on the sustenance of the existing peaceful relationship while assuring them of the company’s continued support.
Addressing the beneficiaries, the Lead Consultant, Bernard Emekpe, said the programme was a testament to NNPC’s vision of engaging the communities in which it operates.
He advised the beneficiaries to see this as a lifetime opportunity and take control of their destiny.
A representative of the host communities, Otokina Goodluck, and some of the beneficiaries said the program was a life-changing opportunity, and promised to make judicious use of it.
The beneficiaries were drawn from Ajaokuta, Geregu, and Aku communities in Kogi State.
Meanwhile, the Republic of Norway has commended the Federal Government on the successful signing of the Petroleum Industry Act (PIA).
The Norwegian Ambassador to Nigeria, Knut EilivLein, gave the commendation during a business visit to the Minister of State for Petroleum Resources, Chief Timipre Sylva in Abuja.
He said they were delighted at the signing of the bill which he said would accelerate development and strengthen the oil and gas industry.
On his part, the Minister of State for Petroleum Resources, Chief Timipre Sylva, said the difference between past efforts and the eventual PIB that was passed by the National Assembly was that all industry stakeholders, including government agencies were carried along.
Still, on the week under review, the GMD was conferred the BusinessDay Energy Executive of the Year Award by BusinessDay Newspaper Management in recognition of his giant strides in repositioning the oil and gas industry in Nigeria.
Receiving the award in Abuja, Kyari said the trust by Buhari was the propelling force behind the many achievements recorded in the nation’s oil and gas sector within the last two years.
He described his position and the confidence that he enjoys from the President as a privilege, stressing that he and members of his management team were working hard to justify the trust in the interest of the nation and to the benefit of Nigerians.
He attributed the transformation and recent profit by the corporation to quality leadership and prudent management of resources, noting that it was part of his efforts towards keeping the trust.
The GMD stated that the corporation’s courage to publish its 2018 Audited Financial Statement with a huge loss was in line with his management resolve to be transparent and accountable to the public, emphasizing that the success story of ¦ 287billion profit in the 2020 financials was a result of the determination to do things differently.
The NNPC helmsman, while appreciating the management of BusinessDay Media Limited for the award, declared, “As the biggest company with the largest assets in Africa, NNPC has no reason not to make a profit.”
Earlier in his remarks, the Managing Director of BusinessDay Media Limited, Dr Ogho Okiti, said globally acceptable parameters were adopted in selecting the awardees.
“In addition, our Business Research and Intelligence Unit (BRIU) in conjunction with our Oil and Gas Editorial Team have carefully analysed the data available on each company as well as their work programme recorded with the DPR for the period between 2019 and 2020 to arrive the selection”, he said.
Also speaking, the Father of the Day, King Alfred Papa Preye Diete-Spiff, acknowledged the contributions of the oil and gas industry to national development, and called for diversification of the economy.
For piloting the corporation into the post-Petroleum Industry Act era, the Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN) pledged its unalloyed support for the management of the NNPC.
The Group Chairman, PENGASSAN, Comrade Victor Odor, disclosed this during a courtesy visit to the Group General Manager, Group Public Affairs Division (GPAD), GarbaDeen Muhammad, in his office in Abuja.
Odor, who said the visit was to felicitate with the corporation’s spokesman on his appointment, declared that the union would stop at nothing to defend the corporation’s current position as a profit-making company against those who believe that NNPC could never do well, adding that the NNPC GMD and his management team have done well in repositioning the corporation and deserved support.
He said the union would focus more on functional conflict management than disruptive conflict management in its constructive engagement with the management to ensure sustainable growth and profitability for the corporation.
Responding, the Group General Manager, Group Public Affairs Division, GarbaDeen Muhammad, who appreciated the union leaders for the kind gesture, said the GMD was very passionate about repositioning the corporation and the entire oil and gas industry.
He assured the union leaders that management was appreciative of their support and was always ready to work with them to take the corporation to greater heights.
The Group Chairman of PENGASSAN was accompanied on the visit by the Group Vice Chairman, Comrade EghosaAghimien, and Group Secretary of PENGASSAN, Comrade OlugbengaShokunbi.

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