Oil Licensing Round: CSOs Ask FG To Publish Beneficial Owners of Bidding Firms

Civil society organizations have asked the federal government to publish details of the beneficial owners of prospective bidding firms.

The groups, during a one-day online workshop on “Urgent Case for Reforms in the Petroleum Industry”said the disclosure of beneficial owners information would promote transparency in the process and encourage serious bidders to show interest.

The group, during the online conference hosted by the Media Initiative on Transparency in Extractive Industries (MITEI), in Abuja said details of the beneficiaries should be among key conditions for those interested in participating in the licensing round for the marginal oil and gas assets planned for later this year.

Beneficial Ownership disclosure is a principle of the global Extractive Industries Transparency Initiative (EITI) for all its member-countries to ensure information about the ultimate beneficiary(s) of the ownership of assets in the extractive industries are disclosed to the public.

As of April 2017, Nigeria was among the 25 African countries that expressed commitment to disclose the beneficial owners of the companies bidding for, operating or investing in the extractives sector.

In December 2019, under the leadership of The NNPC Group Managing Director, Mele kayri , Nigeria became the only country in Africa, Asia and the Americas to actually open a Beneficial Ownership Register for the extractive industries, outside the United Kingdom, Netherland, Denmark and Ukraine.

At the unveiling of the register by the Nigeria Extractive industries Transparency Initiative (NEITI), the federal government said the register aligned with the anti-corruption mandate of the President Muhammadu Buhari administration.

Recall that the Minister of State for Petroleum Resources, Timipreye Sylva, had announced that the country would hold its oil licensing round to auction marginal oil assets in Nigeria.

The exercise, when executed, would be the first in 13 years since the last bid round was held in 2007.

At the workshop, the lead energy expert and Senior Partner, Energy & Commercial Contracts, Primera Africa Legal, Israel Aye, highlighted the negative impact of awarding the country’s oil and gas assets to persons whose identities and capacity are unknown to the public.

He blamed such awards on the powers exercised by the minister of petroleum resources under the Petroleum Act, saying steps must be taken to define due processes and procedures in the Petroleum Industry Bill (PIB) to ensure transparency and accountability, to end arbitrariness and abuse.

“The absolute powers granted the Minister of Petroleum Resources to grant the licenses for the oil assets arbitrarily should be removed,” Aye said.

Speaking on the downstream sector of the petroleum industry, Aye said Section 6(1) of the Petroleum Act, which empowers the Minister of Petroleum Resources to fix petroleum products prices, must be removed and replaced with a framework for price modulation under a deregulated petroleum products market.

He said what the country needed was a framework that would moderate the price modulation mechanism by the Petroleum Products Pricing Regulatory Agency (PPPRA).

“We need a framework that prescribes the role and responsibilities of each institution taking decisions at every point in the petroleum producing pricing process. We need a framework that show how the pricing template was arrived at, the intervals of the price modulation adjustments, whether monthly, quarterly, weekly or daily.

“There must be an agency legally empowered to handle the responsibility of modulation of petroleum products prices in the country outside the NNPC, which should be allowed to face its responsibility of handling the operations side of the business.

“We must demand for an open and transparent process to handle all the issues in the price modulation value chain to remove arbitrariness and exploitation,” the energy expert said