By Upstream staff
Government to throw open its dealings for public scrutiny
Nigerian lawmakers aim to launch a far-reaching audit of the nation’s upstream oil and gas industry next month, scrutinising all major government trans-actions and holding ongoing field development and gas monetisation schemes up for public scrutiny.
If approved, the initiative may cause disquiet among players in the country’s oilpatch, including Shell, already under pressure from the National Assembly over cost over-runs on its deep-water Bonga field.
It is understood the final proposal was delivered last week to the National Assembly by Paris-based law partnership Gide Loyrette Nouel and submitted by Cairo Ojougboh, the chairman of the House Committee on Petroleum Resources, to the board of the Nigeria National Petroleum Corporation.
(NNPC) for signature.
It is hoped the National Assembly, with the consent of the Senate Committee on Petroleum, will sign the agreement later this week when it returns from recess, enabling Gide Loyrette Nouel to start work next month.
The audit should be completed before the end of November.
Ernst & Young will supply accounting expertise.
It remains unclear whether the new audit will involve some measure of duplication with recently completed government-sponsored audits carried out by the Hart Group to unravel the roots of illegal crude bunkering and examine the efficacy of the NNPC’s management systems.
That audit also tested the ability of the NNPC to supervise the capital operating expenditure of its major joint venture partners.
The contract would represent a ground-breaking deal for Gide Loyrette Nouel, which has hitherto concentrated its efforts in North Africa and the Mediterranean.
Several strands of local opinion canvassed indicate resistance in the Nigerian bureaucracy to the new audit on the grounds that Hart’s programme has already done some of this work.
Some sources argued that companies and government departments alike have felt oppressed over recent months by the sheer numbers and intrusiveness of foreign consultants meddling in the minutiae of upstream operations.
However, backers of the new initiative have said it as an important bid by the National Assembly to flex its muscles ahead of next year’s presidential elections, aiming to dissuade explorers from loosening the purse strings and prevent misuse of public funds for campaign purposes.
The National Assembly’s audit follows the ousting of high-profile reformer Oby Ezekwesili from her job as Minister of Solid Minerals. She also chaired the Nigerian Ex-tractive Industries Transparency Initiative.
Former senior World Bank executive Ngozi Okonjo-Iweala resigned as foreign minister last week while in London negotiating debt relief.
In June she was shifted from the influential finance portfolio but, until last week, retained her role as anti-corruption head of President Olusegun Obasanjo’s economic management team.