FG to mandate ownership disclosure of oil assets to curb $1tr losses

•NEITI, Upstream commission move to enforce compliance in the oil sector

The Federal Government, through the recently established Nigerian Upstream Petroleum Regulatory Commission (NUPRC) yesterday, said it would become compulsory for oil and gas companies operating in the country to disclose their owners under the Beneficial Ownership (BO) Reporting system.

The Minister of Finance, Budget and National Planning, Mrs. Zainab Ahmed, said secrecy in the ownership of companies in the country remained a threat to economic growth linking it to money laundering and corruption.

According to the Nigeria Extractive Industry Transparency Initiative (NEITI), Nigeria and other developing countries record losses in the region of $1 trillion yearly due to secret ownership of companies, especially in the oil, gas and mining sectors.

Under the prevailing situation, beneficial owners could run shell companies, charities, and foundations, trust or have nominees, who represent them on board of companies.

Ahmed, represented by Minister of State Budget and National Planning, Prince Clem Agba, at the official launch of global Opening Extractives in Nigeria, in Abuja, said Nigeria had taken concrete steps through the opening of Beneficial Ownership Register by the NEITI and the amendment to Companies and Allied Matters Act (CAMA).

She said: “Knowing the real owners of the companies that bid for, invest in and operate Nigeria’s extractive assets has practical implications for the economic growth, physical security and human development in our country. The Federal Government is aware and concerned that anonymous companies remain the major obstacle in the fight against money laundering and corruption.”

Speaking at the event, Chairman of the NUPRC, Gbenga Komolafe, said while the Nigerian Oil and Gas Asset Beneficial Ownership Register (NOGABOR) portal has been developed by and is life, the commission would engage oil and companies to ensure mandatory compliance.

Komolafe insisted that beneficial ownership transparency remained critical to ensuring the revenue generated from natural resources provides maximum benefit to every Nigerian.

“To be successful, it requires the government, industry and civil society to work together,” he stated while adding that the agency would be committed to collaborating on maintaining information on beneficial ownership, maintaining data on companies that own extractive licenses and creating a better and healthy business climate.

“The results of these is that citizens will be aware of who they are doing business with or competing against and will also encourage appropriate stakeholder engagement which is a part of Nigeria’s Open Government Action Plan,” he said.

He stated that the commission would be transparent, cost-efficient, safe, and sustainable towards the management of the nation’s hydrocarbon resources.

Executive Secretary of NEITI, Dr. Orji Ogbonnaya Orji said the initiative would create a win-win situation for government, citizens and businesses.

He stated that while governments and citizens benefit in the form of increased revenues and welfare, legitimate businesses also benefit from the improved business climate, fair and open markets, level playing field, corporate accountability, increased profitability, return on investments, reduced reputational risks and improved trust and confidence between them and their host communities etc.