Poor implementation of
independent audit reports in oil and gas sector is hampering prudent management of the extractive sub-sector’s revenue, Mr Ledum Mitee has said.
Mitee, who is the Chairman of Nigeria Extractive Industries Transparency Initiative (NEITI) National Stakeholders Working Group, stated this in a statement issued in Abuja.
The statement, signed by NEITI’s Director of Communications, Mr Orji Ogbonnaya, and made available to journalists said that Mitee spoke at a workshop organised by NEITI in Lagos.
He said that the workshop marked the commencement of NEITI’s comprehensive audit of the oil and gas sector activities in 2012.
“If NEITI reports were given the attention they deserved, such issues as confirmation remittances of funds to the Federation Account will not be a subject of controversy,’’ Mitee said.
According to him, the current controversy over allegation of unremitted funds should underscore the need by all relevant agencies to give NEITI audit recommendations the deserved seriousness and support.
He said that with adequate funding and support, the data collection processes of NEITI would be automated, adding that it would enable the organisation to get real time data which could be resorted to in time of controversy.
“A properly resourced NEITI whose audit recommendations are promptly addressed remains vital not only to our economic wellbeing, but enable the citizens derive needed benefits from our extractive resources,’’ Mitee said.
He said that in auditing the oil and gas sector, NEITI was providing critical and reliable information required for the massive reforms in the sector.
He said that the audit was being done at a time when the issues of transparency and accountability were attracting increasing attention in the country.
“It is the first audit that could be conducted under the new set of NEITI requirement and standards that were approved in May, 2013.
“It is coming at a time in our national history that the nation is embroiled in a very unfortunate allegation of non-remittance of oil revenues to the Federation Account,’’ he said.
Mitee said that the remittances controversy would not have arisen had relevant government agencies and institutions taken NEITI recommendations seriously.
He said the workshop would expose all the 88 oil and gas companies in the country and more than 24 agencies covered by the audit to information and data NEITI required for the audit.
“Specifically, this audit will establish the quantities of hydrocarbons produced, exported or imported, and how the licensing processes and agreements were reached and implemented between government agencies and the companies,’’ he explained.
Mitte also said the exercise would examine and validate accuracy of royalties, tax payments, product importation, fuel subsidy management, measurement processes and pricing of federation equity crude.
According to him, it will also check remittances of funds due to government to the Federation Account, among others.
Mitee said that the audit would cover key areas as hydrocarbon flows, volumetric analysis and technical assessment of hydrocarbons streams and examination of procedural system.
“The audit involves data reconciliation, aggregate reporting of hydrocarbons produced and computation of financial implications as well as value analysis during the period under review,’’ he said.
Representatives of 88 companies and government agencies including Shell, Chevron, Mobil, Agip, NNPC, CBN, FIRS, DPR and Office of the Accountant-General of the Federation participated at the workshop.
SON Plans Stiffer Penalties For Fake Products
Standards Organisation of Nigeria (SON) has revealed that it would soon seek an amendment to the Act establishing the Agency, which would prescribe stiffer penalties or sanctions for importers and manufacturers of fake and sub-standard products in Nigeria.
Mallam Farouk Salim, Director General of SON, disclosed this in Abuja at a media briefing to mark the 50th-anniversary celebration of SON.
Salim explained that the provisions of the proposed law would not only stipulate that the importers and manufacturers of sub-standard products be fined, but also jailed on conviction by the court.
He said SON is poised to fight against counterfeit and sub-standard products across the country, adding that “any time Nigerians buy sub-standard products, they are aiding and abetting the closure of Nigerian industries and helping the youths to be unemployed.”
Commenting further on the effects of sub-standard products on the economy, Salim said the importers of counterfeit products contribute to the present insecurity in the country, as their activities have led to the collapse of industries in Nigeria.
Noting that the Act establishing the SON was last amended in 2015, he said, before 2015, the penalties were not very clear in the Act. So, the amendment has empowered us for conformity assessment.
“The reason we always amend the Act is that the world is evolving and industries are always changing
“The people following the rules are also changing. Hopefully, before the tenure of this administration, we will have another amendment that will be presented to the National Assembly.
“For example, in 2015, the penalty for importing sub-standard products was N1 million and N1 million now, is not significant.
“Most of these people importing these products are not poor, they are rich.
“In the industry where people break the rules, it is the consequences that stop them.
“So, we need to amend the Act to increase the jail term or give them the right to fine and make sure that jail term is added to it”.
On the activities of SON over the last 50 years of its existence, Salim said the organisation has gone through a lot of transformation and evolved to become a standards regulatory body of global recognition.
According to him: “It is important to emphasise that SON today has evolved into one of the world’s most reputable standards regulatory bodies due to good leadership demonstrated by the successive Chief Executives.
“This is seen in the various innovations championed by the past and present leaders of the organisation.
“Some of the notable innovations over time in the Organisation are the Mandatory Conformity Assessment Programme (MANCAP) for local manufacturing, and Standards Organisation of Nigeria Conformity Assessment Programme (SONCAP) for offshore assessment of cargoes’’.
Speaking further on the milestones recorded by SON, he said: “To further demonstrate its desire for a more effective standardisation process, the Federal Government introduced the first ever Nigerian National Standardisation Strategy (NNSS) 2020 – 2022 as part of its economic diversification policy.
The strategy, which was developed by the Standards Organisation of Nigeria (SON), is designed to identify priority areas to focus on, based on national needs assessment.
The SON Governing Council recently approved 168 new Standards for publication and dissemination to various sectors of the nation’s economy in furtherance of the ongoing economic diversification policy.
Currently, SON is structured to lead every process that surrounds the preparation of standards relating to products, measurements, materials, and processes among others, and their promotion at the national, regional, and international levels.
“Working within the provisions of the Enabling Act, SON under my leadership, SON has been able to, through the Standards Council, designate, establish, and approve standards in respect of metrology, materials, commodities, structures, and processes for the certification of products in commerce and industry throughout Nigeria.
“SON is a member of international constellations of standards regulators such as the International Organization for Standardization (ISO).
“Upon assumption of duty in September 2020, we have set some goals to make the Organisation to effectively deliver its mandate.
“So far, we have been able to facilitate the return of SON to the Ports and ensure the election of Nigeria into the standards management committee of the African Organisation for Standardisation (ARSO), among others.”
SON was established in 1970 with the creation of the Nigeria Standards Organisation (NSO) as a Department under the Federal Ministry of Industry, Trade and Investment.
By: Nkpemenyie Mcdominic, Lagos
Coy Begins Cargo Tracking In Lagos Port
Webb Fontaine, a leading service provide for Nigeria Customs Service (NCS) has put in place cargo tracking system trade automation for use in Apapa Port.
This was disclosed to our correspondent by Webb Fontaine’s Operations Manager in Nigeria, Vlad Lonescu, who said the feat, which is a breakthrough and major milestone in NCS modernisation drive, will aid online, real-time, and live monitoring containers within controlled areas in the customs zone at the port and outside of the port.
According to him, anomalies such as containers missing in transit, tampering with the seal, broaching, and removal of cargo before the examination can be easily detected and traced using the technology.
It will also change the narrative that neighbouring countries like Benin Republic are ahead of Nigeria in areas of customs and ports aided automation.
According to him: “Customs officers trained by Webb Fontaine will operate the system that will aid in achieving more operational successes that could have been done manually”
The new system, he said, comes with many advantages including building shippers’ and port users’ confidence in theft prevention and curbing other unlawful activities.
“It will save the cost and time of using too much manpower to provide escort services for cargoes in transit as their movements within a geo-fenced zone will be monitored.
“Diversions of cargoes from specified movement itineraries will be swiftly detected with further preventive mechanisms activated to prevent loss or theft of cargo’’.
The feat in Apapa, which will also serve as test run that will be replicated in other ports across Nigeria, will help to position the country as one with a competitive port, befitting for hub status in the West and Central African region.
Webb Fontaine has succeeded in automating the Lagos Free Zone which is first of its kind in the county sitting on 82 hectares of land.
The Lagos Free Zone automation makes the complex stand out amidst 42 other free zones in the country being the first to be so technologically wired for trade.
It is the first free zone in the country to be proximate to the most modern and equipped Lekki Deep-Seaport.
Webb Fontaine’s trade solutions in Nigeria is presently impacting on more than 25 government agencies through automation of their processes and bringing Nigerian business world closer to what obtains in advanced economies where it is providing services, Lonescu said.
“This cargo tracking system, it will function in Apapa, Tin Can port with 2 Inland Container Depots with many objectives, among which is to decongest the port and improve the revenue of the NCS.
“It is also a way of monitoring the containers that are moving between the port and outside, which means we will have eyes on the containers at all times. Therefore, if there is any attempt to tamper with the process, we can immediately flag it and alert the customs officers.
“The NCS will monitor the full process; we are in charge of training the officers that are going to operate and supervise the transit of the goods. They will be in a control room with screens, computers and digital maps, from which they can monitor the movement of each containers.
“By doing this, the port will be decongested, and all stakeholders like the terminal operators, ship owners, freight forwarders and all will be confident that when they move cargo from the port, things will not get lost and they will be safe.
“For now, we are in the pilot stage, and we are bringing in specialists to train officers both inside and outside the port. For Customs, we’re going to do Web Fontaine’s Training the Trainers, so we are not training all the officers who will be in charge of this system; we will train a few, who will then pass on the knowledge
By; Nkpemenyie Mcdominic, Lagos
NNPCL Flares 100% Gas Output Earns Zero Revenue In Sept
In spite of the Federal Government’s gas monetisation policy and pledge to the United Nations to attain net zero by 2060, the Nigerian National Petroleum Company Ltd. flared 100 per cent of their gas output in September and earned no revenue from it during this period.
The NNPCL gas production and utilisation data for September 2022, obtained by The Tide’s source described its subsidiary, Nigerian Petroleum Development Company as one of the worst offenders in gas flaring in September.
The firm and its Joint Venture partners, Seplat Petroleum Development Company and NPDC-Chevron Nigeria, flared 100 per cent of their entire gas output of 106 million standard cubic feet of gas and 7 million standard cubic feet of gas, respectively.
The firm further noted that Newcross Exploration and Production Ltd and Belema Oil flared about 96 per cent and 75 per cent of their 112 million standard cubic feet of gas and 21 million standard cubic feet of gas, respectively.
Also, about 8 billion SCF of gas was flared in September, representing 5 per cent of the total gas output for the month, compared with 10 billion SCF of gas flared in the month, of August, according to the report.
This is coming at a time the country is battling a cash crunch due to a drop in its oil revenue on the back of a significant decline in oil production which dipped to below 1million barrels per day, the lowest in 32 years.
The government has been relying heavily on borrowing to finance its activities, as its debt reached an all-time high of N42.84 trillion in June.
The NNPCL gas production and utilisation data did not state why the firm had flared the whole of its gas production for the month. The firm’s spokesperson, Garba Deen, did not also respond to both phone calls and messages sent to him.
Mobil emerged as the highest gas producer in the month under review with a total output of about 25 BSCF of gas, out of which it utilised 23 BSCF of gas and flared 1.6 BSCF of gas.
Shell Nigeria followed with a total gas output of about 25 BSCF of gas, utilising 24 BSCF and flaring 0.5 BSCF; Chevron Nigeria produced about 24 BSCF of gas, out of which it utilised 23 BSCF and flared 0.2 BSCF of gas and Total Energies Nigeria produced about 23 BSCF of gas, out of which it utilised 22 BSCF and flared 0.6 BSCF of gas.
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