As part of efforts to further enhance its commitment to accountability and transparency, the Nigerian National Petroleum Corporation (NNPC) has joined a group of companies operating under strict standards of the Extractive Industries Transparency Initiative (EITI).
By this initiative, the corporation has become a member of over 65 extractive companies, state-owned enterprises (SOEs), commodity traders, financial institutions and industry partners who commit to observing the EITI’s supporting company expectations.
The move implies that NNPC has publicly declared support for the EITI Principles which includes full disclosure of financial activities such as taxes and payments.
Others include promoting transparency throughout the extractive industries, help public debate and provide opportunities for sustainable development.
Ensure comprehensive disclosure of taxes and payments made to all EITI implementing countries; Publicly disclose beneficial owners and take steps to identify the beneficial owners of direct business partners, including Joint Ventures and contractors; engage in rigorous procurement processes, including due diligence in respect to partners and vendors, among others.
EITI Board chair, Rt Hon. Helen Clark, while welcoming the company’s commitment to the EITI principles said: “NNPC plays a vital role in Nigeria’s economy. Joining the EITI as a supporting company is a welcome step in the NNPC’s journey towards achieving greater transparency and to help ensure that Nigeria’s citizens benefit from their natural resource wealth.”
Minister of Finance, Budget and National Planning and former EITI Board member, Zainab Ahmed, also stressed the importance of ensuring that natural resource wealth contributes to sustainable development, saying: “Increased transparency of Nigeria’s national oil company revenues is contributing to improvements in our country’s domestic resource mobilisation efforts.”
Established in 1977, NNPC has grown to become the largest asset holder across Nigeria’s oil and gas industry value chain. Traditionally an oil and gas entity, it is transitioning towards becoming an integrated energy company with an interest in power generation and transmission.
The state-owned company has recently taken measures to become more transparent. In June 2020, it published audited account for 20 of its subsidiaries. NNPC also publishes its financial and operations report every month on its website, national dailies and online media to keep the public informed about its activities as part of efforts to be accountable to Nigerians. It is working with Nigeria EITI (NEITI) on an action plan to routinely disclose information and it currently publishes some of the data required by the 2019 EITI Standard on its website.
These disclosures demonstrate NNPC’s commitment to its journey to become a more transparent national oil company. Adherence to the EITI supporting company expectations will give further impetus to NNPC’s corporate vision of greater transparency and accountability. Three areas in which there is scope for advancing transparency are revenues and payments to government, contracts governing petroleum exploration and production and consolidated group-level financial statements.
Group managing director of NNPC, Mele Kyari, affirmed his company’s commitment to the EITI: “Becoming an EITI supporting company aligns with NNPC’s corporate vision and principles of transparency, accountability and performance excellence.”
NEITI executive secretary, Waziri Adio, commended NNPC’s move to support the EITI: “NNPC joining the EITI as a supporting company is a major inflection point in the quest for transparency – for the company, for Nigeria’s oil and gas sector, and for the country as a whole. This is so given how critical NNPC is to the sector and to the country.”