Neconde, Prime Exploration, 2 Others Fail NEITI Audit Transparency Compliance

The Nigeria Extractive Industries Transparency Initiative (NEITI) has said four out of 65 companies failed to make submissions in an audit of the oil industry it undertook, thereby failing a key transparency requirement.

The companies which failed to make submissions 2017 in the independent Audit of the Oil and gas industry before the deadline of  August 3rd, 2017 are Aiteo and Network A&P while Neconde and Prime Exploration neglected to make submissions even after the ultimatum with no reason or explanation whatsoever.

A statement by NEITI’s director of communications, Orji Ogbonnaya Orji, said during the ranking exercise, sixty-five (65) covered entities, made up of fifty-five (55) oil and gas companies and ten (10) relevant government agencies, participated.

The report also highlighted that fourteen companies topped the ranking table with a maximum score of 100%.

The companies include Chevron Nigeria Ltd, Consolidated, Continental, Eroton, Esso Exploration, Mobil Producing Nigeria Unlimited and Niger Delta Petroleum Resources.

Other oil companies within the 100% compliance ranking include: Nigeria Gas Company, Orient Energy, Star Deepwater Petroleum and Waltersmith Petroman.

On the part of government, NEITI revealed that two government agencies- the Federal Inland Revenue Service (FIRS) and the Nigeria Content Development and Monitoring Board (NCDMB) also recorded 100% compliance in the ranking.

However, five companies namely, Shoreline, Statoil, Petrobas, Mid Western and ND Western, scored between 98% and 94% to book their respective places in the top compliance ranking category.

Twenty companies scored between 80% and 88% while twelve others recorded between 72% and 75% in an exercise industry experts have described as successful, timely and encouraging.

The criteria for the compliance ranking, according to the statement, focused mainly on two major critical areas in the NEITI audit value chain. These are timeliness and completeness in submission of information and data requested by NEITI in the audit templates.

While timeliness measured when the covered entities submitted the templates, the completeness considered how many of the applicable templates were submitted.

Speaking on the ranking exercise, the Executive Secretary of NEITI Mr. Waziri Adio said  “we decided to rank companies and government agencies covered by the NEITI audit process so as to incentivize timely and complete compliance’’.

Adio added “given that this is the first time we are doing this, we are very impressed with the compliance rate. We commend the high fliers and call for improvement from others. We want to see a situation where all the entities score 100% possibly by next year.’’

The statement further states that the data collection and voluntary submission of information and data in NEITI/EITI Audit process is a major step in the independent audit value chain, adding,  “NEITI wishes to state that this exercise does not represent full compliance assessment with the audit process, as the audit is not yet completed.

All entities will be further ranked in terms of their cooperation with the NEITI auditors, the accuracy of their data and level of reconciliation, among others.”

The process began on 2nd May 2017 when the audit templates were dispatched by NEITI to affected companies and relevant government agencies. This was followed by a workshop to enlighten all the companies and relevant government agencies on their roles in populating the audit templates.

NEITI’s decision to carry out a compliance ranking for companies and relevant government agencies covered by NEITI process is to push the boundaries of implementation of EITI in Nigeria as provided for in the law and global standards.

The 2015 independent oil and gas audit by NEITI is set out to examine payments made by companies including taxes, royalties, rents, signature bonuses where applicable and receipts by relevant government agencies.

The audit will also report on quantities of oil and gas produced, exported or imported. It will carry out validation of payments by companies against receipts by government agencies to determine if companies paid what they ought to pay and if government received what it should receive.

The exercise will equally review policies and procedure of revenue collection, report on cases of under payments and under assessments.

The audit process will weigh the financial, physical and process transactions during the period under review on the scale of transparency and accountability as required by the global EITI standard and provisions of NEITI Act, OrderPaper had reported.