The Nigerian National Petroleum C o r p o r a t i o n (NNPC) has agreed to reveal the identities of real owners of oil blocks, Joint Ventures partnership and contracts in the country’s oil industry. This forms part of key demands by Extractive Industry Transparency Initiatives (EITI) which just announced the emergence of NNPC as a new addition to the list of its global partner firms, exactly 43 years after the establishment of the corporation.
The NNPC, which yesterday confirmed joining a group of over 65 extractives companies, state-owned enterprises (SOEs), commodity traders, financial institutions and industry partners who commit to observing the EITI’s supporting company expectations, added in a statement sent to New Telegraph that its new status would require that it publicly declare support for the EITI Principles. This entails promotion of transparency throughout the extractive industries, help public debate and provide opportunities for sustainable development; publicly disclose taxes and payments and to ensure comprehensive disclosure of taxes and payments made to all EITI implementing countries.
The status also requires that the NNPC publicly disclose beneficial owners and take steps to identify the beneficial owners of direct business partners, including Joint Ventures and contracts, and to engage in rigorous procurement processes, including due diligence in respect to partners and vendors. Other requirements are that the corporation delivers natural resources in a manner that benefits societies and communities and to ensure that company processes are appropriate to deliver the data required for high standards of accountability.
EITI Board Chair, Rt. Hon. Helen Clark, welcomed the company’s commitment to the EITI: “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.” Zainab Ahmed, Nigeria’s Minister of Finance, Budget and National Planning and former EITI Board member, also stressed the importance of ensuring that natural resource wealth contributes to sustainable development, saying that: “Increased transparency of Nigeria’s national oil company revenues is contributing to improvements in our country’s domestic resource mobilisation efforts.”
Their comments were contained in a statement issued by Group General Manager, Group Public Affairs, NNPC, Dr. Kennie Obateru. Established in 1977, NNPC has grown to become the largest asset holder across Nigeria’s oil and gas industry value chain. Traditionally, an oil and gas entity, it is transitioning towards becoming an integrated energy company with an interest in power generation and transmission. 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.
Mele Kyari, Group Managing Director of NNPC, affirmed his company’s commitment to the EITI: “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.”