Home Business CISLAC, Transparency call for reform in oil and gas sector

CISLAC, Transparency call for reform in oil and gas sector

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Civil Society Legislative Advocacy Centre, CISLAC, and Transparency International Nigeria, TI, Friday, called for urgent reform in the oil and gas sector over alleged corrupt practices.

This was contained in a statement signed by the Executive Director, CISLAC, Auwal Ibrahim Musa, where the CSOs expressed concern over hemorrhage on revenue flows and oil production that has earned Nigeria’s oil sector a not-too-favorable reputation both locally and internationally.

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According to the statement there are several reports on activities of the sector – including commissioned inquiries, audits, and investigations that have stressed transparency and accountability as crucial elements behind the inefficiency and corruption in the sector.

The statement reads in part, “Civil Society Legislative Advocacy Centre (CISLAC)/ Transparency International Nigeria, a long-standing Civil Society engaging the Extractive sector is calling on the administrators of the oil and gas sector in Nigeria to take more decisive action in a bid to reform the sector.

“Since Nigeria started exploration in the oil and gas sector, we have experienced a plethora of notable commitments and pronouncement from the successive leadership of the relevant institutions governing the oil and gas sector in Nigeria focusing on the sector’s transparency, accountability, inclusive development, sustainable governance, management of refineries and issues of deregulation/liberalization of the sector.

“We note that there are several reports on activities of the sector – including commissioned inquiries, audits and investigations that have stressed transparency and accountability as crucial elements behind the inefficiency and corruption in the sector.

“These accountability issues are responsible for the hemorrhage on revenue flows and oil production that have earned Nigeria’s oil sector a not-too-favorable reputation both locally and internationally.

“Take the COVID-19 pandemic and its effect on the oil price in the world as an imperative for the need to diversify the nation’s economy and invest in other sectors which provide added larger added value and more disposable revenues to the underemployed and vulnerable like agriculture, technology, etc.

“This is a wakeup call for all Nigerians to fight against the frivolous waste in the governance process. The continuous mismanagement and corruption of the extractive sector are eroding substantial investments in sustainable development.”

The statement also called on the Executive and Legislative arms of government to see how to cut cost of governance in the face of the current threats to the economy in the proper management of the resources.

“It is high time that the Presidency and the Legislature to implement a substantive cut in the cost of governance and channel these funds to sustainable development projects, which would benefit the poor as opposed to the elite, which is a disproportionate recipient of Nigeria’s commonwealth.

“In times of crisis, projects that have no economic benefits should be terminated. Proper cost-benefit analysis before engaging in any project is the only way to reduce inefficiency and promote value for money.”

However, the statement commended the monthly reportage on the Corporation’s transactions and described it as a welcome development that is contributing to improving the image of the Corporation and the global rating of Nigeria’s oil sector.

The statement also supported the removal of subsidy on petroleum products by the NNPC and moves to hand over refinery management to an independent body.

“On the wake of April 8, 2020, we were met with a press statement signed by Dr. Kennie Obateru-Group General Manager, Group Public Affairs Division of the Nigerian National Petroleum Corporation announcing the removal of subsidy in the petroleum products and also the decision for NNPC to hand over refinery management to an independent body. This also have been reiterated by the GMD, of NNPC on several media appearances stressing the same issue

“We think that this is a step in the right direction considering the current hemorrhage occurring in the sector through the subsidy/under-recovery regime and the running of the refineries.

But the statement expressed worry over silence by the Minister of Petroleum and the Minister of State on removal of subsidy on petroleum products by the NNPC and proposed hand over of refinery management to an independent body.

“On the other hand, we are worried about the position of both the substantive Minister for Petroleum Resources and Minister of state who have neither made any pronouncement on this issue since it was released to the public by the NNPC leadership. Hence, some pertinent questions need to be raised and answered:

i) on which law is this pronouncement made enforceable since the Petroleum Industries’ Bill (PIB) is not in-sight anytime soon;
ii) what is the implementation plan to implement this detailing how the effects will be cushioned by the government to avoid acute negative effect on the citizens and impending push back;
iii) who else is consulted on this decision so that prevent unilateral decision which is going to be refuted by other administrative stakeholders in the sector and makes it un-implementable?

“We hereby call on the Presidency, the National Assembly and the Ministry of Petroleum Resources to wade into this issue and provide more clarity on this very crucial decision at this critical stage in our Nation’s economy which is still as at now largely dependent upon this sector.”

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