Oil Revenue Loss: NUPRC’s Regulatory Framework – Komolafe

…Says commission is focused on prevention and elevation of transparency in the energy sector

As part of the effort to stop oil theft and illegal financial flows in the country, the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) has revealed that the commission has come up with a policy framework that will enhance proper monitoring, transparency and ensure accountability of crude oil taken from the country.

The commission also expressed that the new regulatory framework known as the Nigerian Upstream Petroleum Measurement Regulations, 2023 in line with the PIA, is a new initiative that will create a paradigm shift in oil-related revenue generation in the country.

Chief Commission Officer, NUPRC, Engr. Gbenga Komolafe disclosed this while speaking at a two-day National Anti-Corruption Conference organized by HEDA Resource Centre and Centre for Fiscal Transparency and Integrity Watch (CFTI) in Abuja.

The theme for the conference is ‘Nigeria and the Fight against Corruption: Reviewing the Buhari Regime and Setting Agenda for the Tinubu Administration’. He stressed that the new policy regulation is the first of its kind since 1956 when oil was discovered in the country.

He said that the policy will also address the issue of overloading and dispensing oil from the source, which invariably gives rise to making money from the illicit process.

According to him ‘While it’s critical to follow and recover illicit financial flows, it’s perhaps more critical to prevent illicit financial flows . One is reactive while the later is proactive.

Speaking further, Engr. Komolafe emphasized that “The commission is focused on proactive corruption prevention and elevation of transparency in hydrocarbon accounting in the Nigerian oil and gas industry. stressing that wrong hydrocarbon accounting practice has pervaded since 1956 oil discovery in Nigeria. So, NUPRC is poised in a revolutionary move to stop the corrupt practice”

‘’The idea is to stop the illicit financial flows from the source. When that happens it will make the work of the EFCC, and ICPC very easy” he stated.

A copy of the policy document sighted by our correspondent shows that the regulation will ensure a licensee or lessee has a metering plan approved by the Commission for the measurement of petroleum production from its producing license or lease area.

According to the policy document the Measurement equipment and metering systems deployed by a licensee or lessee under a metering plan shall conform with the standards as prescribed in a regulation, guidelines, or directives issued by the Commission.

Also, the policy document stated that a lessee shall carry out the installation of metering equipment and metering services under a metering plan through a licensed metering services provider in accordance with the provisions of these Regulations. Thus, a licensed metering services provider shall be an original equipment provider (OEM) or its agent, approved by the Commission.

It also reads ; a Measurement equipment and metering systems deployed by a licensee or lessee under a metering plan shall conform with the standards and specifications prescribed in a regulation, guidelines or directives issued by the Commission.

‘The standards and specification referred to in sub regulation of this regulation shall relate to the design, fabrication, manufacture, installation, calibration, operation, maintenance, upgrade and inspection or any other requirement as may be determined by the Commission.

A metering service provider shall deploy technology and back-office systems to measure production from the licensee’s or lessee’s petroleum operation ;report the measured production to the Commission on an on-line real time basis ; and create an interface for data sharing on an on-line real time basis between the lessee and the Commission.

He noted that with this development, the era of operator harmonizing crude oil figures with NUPRC staff is gone .

However, the summit comes on the 20th anniversary of the African Union, AU Convention on Preventing and Combating Corruption declaration which took place in July 2003.

Earlier at the event, a Senior Advocate of Nigeria, Mr. Femi Falana, said billions of dollars were being lost by Nigeria to oil theft and the refusal of oil companies to pay the total expected taxes amounting to billions of naira over the years.

Falana said such behaviour had failed to attract any sanctions. He said Nigeria also failed to put a mechanism in place to determine how many litres of oil are taken from the country’s onshore and offshore.

Falana, while delivering his lead presentation on the theme: Effective recovery of illicit assets and blocking opportunities for Illicit Financial Flow; Role of international frameworks, Bodies, Courts and instruments in a context of new dispensation, described Illicit financial flow as a challenge for the country.

“Illicit financial flow is a challenge to Nigeria and the recent devaluation of Nigeria’s currency. Civil servants cannot live on their salaries which might draw them to corruption,” he said.

HEDA Chairman, Olanrewaju Suraju, noted that there had been no reason to believe that there was going to be any serious fight against corruption given the experiences in the past years.

He said Nigeria’s hope is rekindled by the iron-cast will of Nigerians and the irresistible wind of change blowing against corruption across the world, which Nigeria cannot exempt itself from.

Suraju said there was a need to set an agenda for constructive CSO engagement with the new government in Nigeria to develop a framework for good governance.

President Bola Tinubu was tasked with the immediate need to decisively fight corruption to halt the country’s possible drift into a major economic crisis amidst reports that Nigeria loses about $60 billion every year to corruption.

HEDA observed that Nigeria with a debt portfolio of N77 trillion, inflation rate of 23 percent, and GDP of 2.35 percent coupled with unrelenting zeal for graft by public officials, the new government needs to take a bold step to block waste, stop corruption and recreate new public confidence to save the country from social crisis.

Some of the agenda set for the new government include fast-tracking the whistleblower law, paying backlog of royalties by oil companies, getting anti-corruption courts to speed up prosecution of corruption cases, and implementing the public procurement law.

The National Assembly was also charged to affirm Nigeria’s readiness to join the International Special Task Force on Corruption (SATF) to enable the efficient recovery of illicit funds.

Participants also listed the retrieval of billions of naira paid as oil subsidies in the past years, oil theft, public funds stolen by political actors and a significant cut in the cost of governance as some of the critical steps that Tinubu should take to save the country.

Represented at the event were Vice President Kashim Shettima, Inspector General of Police, Mr Kayode Egbetokun, National Security Adviser, Mr Nuhu Ribadu, the National Assembly, the Judiciary, Ministry of Interior and international partners, the United Nations Development Programme, UNDP, the United States and Dutch Embassies, MacArthur Foundation, World Bank, United Nations Office on Drugs and Crime, labour, media and the civil society.

Ribadu expressed the commitment of the Tinubu-led administration to build the capacity of investigators, as part of efforts to enhance the war against corruption in the civil service and Nigeria as a whole.

Ribadu, who was represented by the Special Adviser, Legal Department, NSA, Anthony Oluborode, maintained that a cap would be placed on fiscal expenditures for the construction of government buildings and salaries related compensation, packages of elected officials, adding that such expenditure will have a low priority in the Tinubu-led administration and transparent.

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