Revolution in nation’s oil industry as govt orders major auditing of oil sectors

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Code of Conduct Bureau

Spurred by the recent uprising in Nigeria on the withdrawal of Oil Subsidy and the eventual commitment to dissociate from the misgovernment of the past,  the federal government has ordered  complete overhaul of the nation’s oil industry, ordering a fresh auditing  of the  oil and gas sector.

The auditing exercise will  cover the last three years on Wednesday January 18 2011, in a swift bid to clean up corruption in the nation’s oil industry.

The move follows the opening of an investigation into the sector by the corruption watchdog and a separate Senate investigation into fuel subsidies and oil management in the country.

The order was given by the nation’s Federal Executive Council.
“As part of government’s anti-corruption agenda, council today … approved the award of contracts to two audit firms to conduct a thorough audit of the accounts and activities of all government institutions and entities in the oil and gas industry from 2009 to 2011 with nine months completion period,” Information Minister Labaran Maku said.

President Goodluck Jonathan has come under intense pressure to clean up Nigeria’s 2 million barrel per day oil sector, after a week of protests over fuel prices revealed public anger about corruption and waste of the country’ oil wealth.

Unions called off a weeklong strike on Monday, after Jonathan partly backed down on the scrapping of a popular fuel subsidy. He and oil Minister Diezani Allison-Madueke promised prompt action to implement delayed reforms to the oil sector.

However, with the jungle award of oil contracts to powerful people and the control of the sector by a very strong force of opportunists, the regulation of the industry has been almost impossible, even by the government.

The reality of ordinary Nigerians suffering from long years of exploitation and abuse, which spurred last week’s protest against oil subsidy  however has cushioned the government resolve and confidence to hold the bull by the horn in tacking corruption in Nigeria.

“With the recent event, it is left for Jonathan to sanitise the industry to sink forever the boat of corruption in Nigeria, or he would remain weak until the forces sink him and his government”, a source told EMNnews in London.
According to Maku, two Nigerian leading Auditing firms have been given the auditing responsibility. Their names were given as  Haruna, Yahaya & Co. and Sada, Idris & Co.

“The audit would be carried out in all government revenue generating … institutions and entities in the oil and gas and solid minerals sectors of the country,” he said. “The audit firms shall access production, exports, imports and unaccounted oil and gas … and other relevant streams.”

On Monday Nigeria’s anti-graft agency, Economic and Finance Crime Commission acting on an order from Allison-Madueket  launched an investigation into the subsidy system, sending agents to the state oil company and petroleum pricing regulator.

Unions called off a week long strike on Monday, after Jonathan partly backed down on the scrapping of a popular fuel subsidy. He and oil minister Diezani Allison-Madueke promised prompt action to implement delayed reforms to the oil sector.

On the same day, her ministry announced that it had set up a committee designed to facilitate the passing of an oil bill meant to overhaul the entire sector.

Skeptics will point out that the Nigerian government has invited auditors into its oil and gas sector before — and failed to act on their reports.

A report compiled by international accounting firm KPMG into the opaque state oil company has been on the oil minister’s desk for a year, but no action has been taken on it yet.

(Reporting by Felix Onuah; writing by Tim Cocks; editing by Keiron Henderson)