NEITI to Launch Report on 13% Derivation, Invites Dangote Refinery to Join EITI Process

The Nigeria Extractive Industries Transparency Initiative (NEITI) yesterday disclosed that it was set to launch a report into the 13 per cent derivation received by oil-producing states in the Niger Delta, as part of its fiscal allocation and statutory briefs, to determine the use of the accruals in the last five years.

Executive Secretary of NEITI, Dr Ogbonnaya Orji, in his quarterly update on the Extractive Industries Transparency Initiative (EITI) implementation in Nigeria, stated that the study will also look into whether the oil-producing sub-national governments fully received what was due them.

Besides, the executive secretary stated that the Initiative was working on a policy brief on domestic resource mobilisation, focusing attention on the areas government could generate funds, rather than embarking on incessant borrowing.

“NEITI conducts three sets of reports: Solid minerals, oil and gas, and the fiscal allocation and statutory disbursements reports, but for the FASD, this time around, we are focusing on 13 per cent derivation.

“There have been a lot of concerns that the 13 per cent derivation, nobody has the figures, whether the states are getting what they should get and where the money is going. What did we use the money for?

“So we are looking at 13 per cent derivation that goes to oil producing states. At least our target is to establish a baseline information and data for the last five years. That study is to commence very soon,” Orji stated.

According to Orji, NEITI has also commenced the conduct of the 2022-2023 industry reports of the oil, gas and mining sectors, with two indigenous independent administrators conducting the exercise.

The ES explained that September 2024 has been set as the date for the completion of the reports.

In the oil and gas sector, he stated that the terms of reference will include the disclosure of information on the regulatory framework for the sector. procedures for awards and transfers of licenses as well as disclosure on production and export levels.

In addition, Orji stated that further disclosure on greenhouse gas (GHG) emissions; company payments and government revenues from oil and gas, revenue management and distribution highlighting subnational transfers and revenue sustainability will be made available.

Other areas of reference, he said, will be to disclose information on the contribution of the oil, gas & mining sectors to the economy, show adherence to approved data quality assurance procedures as well as information on the employment data and earnings by gender.

In solid minerals, some of the terms of reference include: To report on the regulatory framework for the solid minerals industry as well as provide the statutory procedures for awards and transfers of licenses and assess if the procedures were followed in practice.

He explained that it will also disclose comprehensive information on property rights to mineral licenses and leases, information on the exploration activities in the solid mineral sector, among others.

On the Dangote refinery, Orji explained that the company is covered by NEITI, since it operates in the extractive industries, pointing out that he had already paid a visit to the Lagos office of the company to intimate them of what is required of them.

“NEITI also recently met with the Managing Director / CEO of Dangote Refineries where NEITI stressed the need for EITI compliance and the Dangote Refineries have been invited to join EITI as a supporting company.

“Now, the highest investment in the downstream sector is the Dangote refinery. And when we have had a meeting in Lagos with the CEO to begin early to expose them to what NEITI is and what NEITI is not, and to draw a link on why they will want to work with us.

“And we are working together now, and we have shared a lot of information. The next step will be a formal visit...to inspect the facility, and then some formal rules of engagement,” he stated.

Stressing the organisation has already been given guidelines, Orji noted that the organisation made a case why they should consider as urgently as possible to become a supporting company of the EITI.

Besides, he argued that it was even more important to introduce ownership of the refinery to the process because Nigeria has a 20 per cent stake in the facility and that it pays taxes on Nigerian soil.

Orji further clarified that NEITI has a 15-member board as provided by law and not 16 as reported recently and that he (Orji) was only serving out a five-year single term and not a new tenure.

He disclosed that NEITI was set to host the maiden edition of the NEITI House Dialogue, a quarterly policy engagement, which will see the Chief Executive of the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), Gbenga Komolafe, grace the first edition.