- Automation of processes to aid accountability, check seepage
Nigeria’s Minister of State for Petroleum Resources, Dr. Emmanuel Kachikwu, disclosed that the Federal Government had recovered no less than N1.2 trillion in unpaid royalty from crude oil sales, following the Ministry’s automation initiatives. With some oil firms yet to remit their royalty to the Federal Government at the expiration of the statutory deadline, the Minister said such firms may lose their licences if they failed to make remittances within the extended timeline.
Having generated $1.5 billion from renewal of licences, Kachikwu said t the Ministry is speeding up licensing procedure in Nigeria, by taking away the discretionary parameters of directors as well as creating a platform for the resolution of issues that may arise.
Addressing journalists on the Crude Oil and LNG Tracking (COLT) and other automation initiatives embarked upon by the Ministry through the Department of Petroleum Resources (DPR), Kachikwu explained that the automation of many of the processes in the crude oil value chain has aided tracking of revenue by the government.
According to him, while the issue of transparency remains key in the oil industry, there are expectations that the new initiatives will address such concerns, especially as it relates to volume of daily oil production, export, import, and issues of leakages in the system. He noted that hitherto, the country had always depended on the international oil companies for data to determine the volume of crude oil produced in the country, adding that the new initiative will help the government to enforce regulations, recover its revenues better having known the volume of products produced.
“We have been able to tell where those products have gone to in terms of export, whether they have been able to discharge, and we have also been able to say on a forensic basis whether there are some suspicious movement of those vessels after they have products in them.“We have extended the automation to the downstream sector to be able to capture everything that is brought into this country in terms of importation of refined products and we have also been able to track their distribution. So, for the first time, we have a holistic database, IT based application that enables us to do that.
“We have also launched the benchmarking system to track expenses to see how we can pull down the cost of producing oil in this country which has been the major challenge for us given the price of crude oil in the world. Unless, we are been able to do this, we will produce all the oil and make no money out of it.
“This is very to helpful to us and we have been able to charge the oil companies to match the best practices internally and collectively, match the best practices externally in terms of oil pricing. We have also been able to explain to you what we do as regards early renewals, and what we have generated both on forcing people to become current on payment of outstanding royalties, and what we have generated in terms of current licences and early renewal basis. Those are the pivots of what we have done today,” he explained. The Director of DPR, Mordecai Ladan, noted that the agency was able to achieve the task given to it by the Minister, and would intensify efforts to ensure that the process achieves its goal.