By Emmanuel Addeh
The Nigerian National Petroleum Corporation (NNPC) has announced that it has officially become an Extractive Industries Transparency Initiative (EITI) partner company, as part of its push for greater accountability in the corporation’s operations.
With the move, the national oil company joins a group of over 65 extractive companies, state-owned enterprises (SOEs), commodity traders, financial institutions and industry partners who are committed to observing EITI’s supporting company expectations.
The Group General Manager, Group Public Affairs Division, NNPC, Dr Kennie Obateru, said in a statement Tuesday that the new status now requires it to publicly declare support for the EITI principles by promoting transparency throughout the extractive industries, help public debate and provide opportunities for sustainable development.
It also means that the corporation will now publicly disclose taxes and payments, ensure comprehensive disclosure of taxes and payments made to all EITI implementing countries and publicly disclose beneficial owners as well as take steps to identify the beneficial owners of direct business partners, including Joint Ventures and contractors.
The initiative will further see the corporation engage in rigorous procurement processes, including due diligence in respect to partners and vendors, deliver natural resources in a manner that benefits societies and communities as well as ensure that company processes are appropriate to deliver the data required for high standards of accountability.
Speaking on the development, the EITI board chair, Helen Clark, welcomed the company’s commitment to the EITI, saying that it was one of the many steps towards ensuring more openness in Nigeria’s oil industry.
“NNPC plays a vital role in Nigeria’s economy. Joining the EITI as a supporting company is a welcome step in the NNPC’s journey towards achieving greater transparency and to help ensure that Nigeria’s citizens benefit from their natural resource wealth,” she said.
“The state-owned company has recently taken measures to become more transparent. In June 2020, it published audited account for 20 of its subsidiaries.
“NNPC also publishes its financial and operations report every month on its website, national dailies and online media to keep the public informed about its activities as part of efforts to be accountable to Nigerians.
“It is working with Nigeria EITI (NEITI) on an action plan to routinely disclose information and it currently publishes some of the data required by the 2019 EITI standard on its website.
“These disclosures demonstrate NNPC’s commitment to its journey to become a more transparent national oil company. Adherence to the EITI supporting company expectations will give further impetus to NNPC’s corporate vision of greater transparency and accountability.
“Three areas in which there is scope for advancing transparency are revenues and payments to government, contracts governing petroleum exploration and production and consolidated group-level financial statements,” the transparency initiative said.
In her remarks, the Minister of Finance, Budget and National Planning and former EITI Board member, Zainab Ahmed, also stressed the importance of ensuring that natural resource wealth contributes to sustainable development.
“Increased transparency of Nigeria’s national oil company revenues is contributing to improvements in our country’s domestic resource mobilisation efforts,” she noted.
The Group Managing Director, NNPC, Mele Kyari, in his comments, affirmed his company’s commitment to the EITI, saying that the corporation will continue to pursue policies that will ensure more access to its books.
“Becoming an EITI supporting company aligns with NNPC’s corporate vision and principles of transparency, accountability and performance excellence.
“Our partnership with NEITI and EITI strengthens our commitment towards commodity trading transparency, contract transparency and systematic disclosure of revenues and payments. We are on a journey towards greater transparency and look forward to deepening our collaboration with the EITI to further this work,” Kyari said.
The NEITI Executive Secretary, Waziri Adio, also commended NNPC’s move to support the initiative, opining that the move is not only good for the corporation but for the entire country.
“NNPC joining the EITI as a supporting company is a major inflection point in the quest for transparency – for the company, for Nigeria’s oil and gas sector, and for the country as a whole.
“This is so, given how critical NNPC is to the sector and to the country. NEITI welcomes this bold commitment. We will continue to work and walk with NNPC to translate its espoused commitments to transparency and accountability into concrete and sustained actions and results,” Adio said.
Last year, Qatar Petroleum joined as an EITI supporting company and has now published its annual and sustainability plans for the first time.
The initiative posited that its mission is to promote understanding of natural resource management, strengthen public and corporate governance and provide the data to inform greater transparency and accountability in the extractive sector.
“By becoming a member of the EITI, 54 countries have committed to disclose information along the extractive industry value chain – from how extraction rights are awarded, to how revenues make their way through the government and how they benefit the public.
“Through participation in the EITI, countries agree to a common set of rules governing what has to be disclosed and when – the EITI standard,” it said.
Established in 1977, NNPC is the largest asset holder across Nigeria’s oil and gas industry value chain.
Although, traditionally an oil and gas entity, it is transitioning towards becoming an integrated energy company with its recent interest in power generation and transmission.