12 Mar

Nigeria State Oil Company Hasn’t Explained Missing Billions

An agency tasked with cleaning up Nigeria’s murky oil industry says even though financial accountability has improved the state oil company still hasn’t explained billions of dollars of missing revenue.

While energy producers have cooperated and complied with requirements to publish payments, the Nigeria Extractive Industries Transparency Initiative has struggled with the state-owned Nigerian National Petroleum Corp., Waziri Adio, executive secretary of the agency known as Neiti, said in a March 7 interview in Abuja, the capital.

The state oil company hasn’t explained what it did with at least $22.7 billion earned from the sale of oil licenses and in dividends from its stake in Nigeria LNG Ltd. over a 15-year period, he said.

“The sector is no longer the black hole that it once was, but we can still use more transparency,” Adio said. “Things are opening up. There could be more in the area of contracts, ownership and expenditure transparency, but definitely there is some progress.”

Ndu Ughamadu, NNPC spokesman, didn’t answer three calls on his mobile phone and two text messages seeking comment. The company has said in the past it has the authority of the government in its actions.

Royal Dutch Shell Plc, ExxonMobil Corp., Chevron Corp., Total SA and Eni SpA operate joint ventures with the state oil company that account for about 90 percent of the output of Nigeria, Africa’s top producer.

Neiti was set up in 2004 after Nigeria acceded to the Extractive Industries Transparency Initiative, which requires international energy companies and governments involved in mining to publish all their payments.

Nigeria LNG is owned 49 percent by NNPC, 25.6 percent by Shell, 15 percent by Total and 10.4 percent by Eni. President Muhammadu Buhari, who pledged during his 2015 election campaign to fight widespread graft in the oil and gas industry, appointed Adio, 49, in February 2016 to head Neiti.

For all its work in auditing oil industry payments, critics say the agency remains toothless, lacking the power to compel companies to disclose payments or penalize erring producers.

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