–Reviews forward sales of Nigeria’s crude oil
By Obas Esiedesa, Abuja
The Nigeria Extractive Industries Transparency Initiative, NEITI, has disclosed that it will review the processes that led to the divestments of about 26 oil blocks in deals worth $6.033 billion by five International Oil Companies, IOCs, operating in Nigeria’s oil and gas industry.
The transactions include TotalEnergies’ asset sale to Chappal ($860 million), ExxonMobil’s sale to Seplat ($1.28 billion), Eni’s sale to Oando Plc ($783 million), Equinor’s sale to Project Odinmim ($710 million), and Shell’s sale to Renaissance ($2.4 billion).
Speaking to journalists in Abuja over the weekend, NEITI’s Executive Secretary, Dr. Orji Ogbonnaya Orji, emphasized the need to ensure that the divestments adhered to due process and that all revenue due to the government was duly remitted.
According to him, “Oil and gas divestments are reshaping Nigeria’s industry. NEITI recognizes the urgent need for transparency in these transactions to protect national interests, host communities, and revenue flows. To achieve this, NEITI will:
“Expand industry reports to include dedicated sections on divestments.
Strengthen collaboration with NUPRC and NNPC Ltd. to ensure full disclosure of financial, social, and environmental aspects of divestments. Promote greater public awareness and engagement in asset transfers”.
He expressed concern that some of the divestments might not have properly addressed environmental issues raised by oil producing communities.
“Oil and gas companies must be held accountable for clean-up costs and remediation efforts. NEITI will work with NUPRC (Nigerian Upstream Petroleum Regulatory Commission) and the Ministry of Environment to ensure transparency in environmental remediation funds”, he added.
Also, following complaints of inadequate supply of crude oil by local refineries, NEITI said it would review the forward sales of Nigeria’s crude oil by the Federal Government in exchange for loans.
Dr Orji stated: “Forward sales (pre-sales of crude oil and gas) impact government revenues and fiscal stability. NEITI will intensify collaboration with NNPC Ltd. and other government agencies to disclose forward sales data”.
He pointed that Nigeria has earned $831 billion from oil and gas in the past 23 years when NEITI began the conduct of the audit of the sector.
“As we commence the 2024 Oil, Gas, and Solid Minerals Reports, we will expand our reporting framework to address: Forward sales and pre-export financing transactions.
Environmental remediation funds and asset divestments. Revenue tracking and fiscal accountability”, he disclosed.
Dr Orji stressed that while Nigeria has made progress in ensuring transparency in the oil and gas, and solid minerals sectors, a lot of work still needs to be done
He said: “While we have made remarkable progress, challenges remain. Institutional constraints, funding limitations, and resistance to change must be continuously addressed. However, we have learned key lessons: Transparency must be dynamic. Accountability must be proactive. Governance must evolve with emerging global trends”.
He said the country needs to “deepen beneficial ownership disclosures. Strengthen revenue tracking and contract transparency. Ensure full implementation of extractive sector governance reforms.
“Transparency is not just a policy; it is a responsibility. NEITI remains steadfast in ensuring that Nigeria’s oil, gas, and mining revenues are managed for the benefit of all citizens”.
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