Abuja — The Nigeria Extractive Industries Transparency Initiative (NEITI) has disclosed that it has started the processes of a comprehensive independent audit of the oil and gas sector, as well as revenues earned by Nigeria in the sector in 2015 and 2016.
NEITI stated in a statement, which was made available to THISDAY in Abuja that the independent audit would be conducted in line with the principles and standards of the global Extractive Industries Transparency Initiative (EITI).
NEITI said its Executive Secretary, Mr. Waziri Adio, disclosed this in Lagos at a workshop for major oil companies and relevant government agencies expected to participate in the exercise.
Adio, the statement added, explained that the workshop was designed to acquaint the participants with the structure and content of the template, the kinds of questions that NEITI would ask and the answers expected to be provided by the covered entities.
"This workshop is to seek your views, suggestions and inputs as well as listen to your concerns on how to make the exercise hitch-free," Adio said.
NEITI equally stated that it will introduce a ranking reward system to incentivise participation of covered entities.
Under the ranking system, companies will be graded based on their efficiency in populating the audit templates including the quality and depth of information and data provided, quick response to set deadlines among other considerations.
Adio in this regards, said that the ranking system will be shared with over 51 member countries of the global EITI and multi-lateral organisations to serve as reference points on adherence to business ethics for major investment decisions in Nigeria.
"NEITI is committed to working closely with the companies under the EITI framework to create good business environment that is conducive for the inflow of more foreign direct investments into the extractive sector. For this to happen we encourage all companies to embrace transparency, accountability and corporate governance in conformity with the EITI standards," said Adio.
He however, warned that NEITI will not hesitate to invoke relevant sanctions under the law on companies and other covered entities that fail to cooperate with it during the exercise.
According to the statement, all major international oil and gas companies operating in Nigeria, as well as relevant government agencies such as the Nigerian National Petroleum Corporation (NNPC), Federal Inland Revenue Services (FIRS), Department of Petroleum Resources (DPR), Niger Delta Development Commission (NDDC), and Nigerian Liquefied Natural Gas Ltd (NLNG), were at the workshop.
It said that it has already commenced distribution of the templates to participating companies and government agencies, adding that all populated templates with the required information and data are expected to be returned to NEITI on or before the 31st of May, 2017, after which it would conclude the independent audit and make its findings public by the end of the year.
NEITI explained that the independent audit of the oil and gas sector by NEITI for the period 2015 and 2016 will examine the fiscal, physical and process issues from, within and among the companies and relevant government agencies.
It noted that the audit will undertake special verification and validation of information and data on the payments made by the companies to government entities, as well as government receipts.
Other areas to be covered will include quantities and volumes of crude produced, balances payable or receivable on certain financial transactions, taxes, royalties on project by project basis, social contributions and investment flows