Presentation on the need for proper accountability in handling oil proceeds.

1. THE PLACE OF ACCOUNTABILITY IN THE
EFFECTIVE OPERATIONS IN THE OIL AND
GAS INDUSTRY IN NIGERIA
BY
Mercy udu idika

2. Introduction
• Nigeria’s economy is heavily dependent on the capital
intensive oil sector. Oil accounts for about 95% of foreign
exchange earnings, 98.8% of total exports and 83% of
government budgetary revenues (IIledare & Suberu, 2010.)
• Considering the use of oil revenue to maintain the military
and its facilities, to fund the country’s budget and maintain
the huge expenses of the nation, accountability in handling
the operations of the oil and gas sector cannot be
overemphasised and it is the best policy to adopt to meet
up the challenges of government huge expenses. ….

3. Intro…contd
• Accountability simply means responsiveness to ones actions
and inaction, justification of a decision and in the case of
public accountability, it involves development of objective,
standards of performance of duties by individuals and units
within an organization (Ademolekun, 2002, Agu, 2009).
Accountability and transparency is a word that occurs when
it is necessary for issues regarding public interest if the
ultimate challenge is associated with oil and gas which is a
natural resource. We have three types of public
accountability as indicated in the diagram:

4. Intro contd.
• PUBLIC ACCOUNTABILITY
Political
accountability
Fiscal
accountability
Administrative
accountability

5. Intro…contd
• Our concentration is on the public accountability in
reference to administrative accountability because the oil
and gas sector is a natural resource of the nation which is
public goods and its revenue is used by the populace for
improved efficiency and even development of the nation.
The study therefore pose the question:
• What is the best process to be adopted to achieve
accountability in the oil and gas sector? And with a specific
objective to critically examine the issue of accountability in
the oil and gas industry.

6. Literature Review
• The study adopted the use of governance theory which
offers an attempt to properly understand the political,
economic and social changes that frequently occur in the
world and how these changes can be tamed (Stoker,!998).
According to Van Kersbergen, and Van Waaden (2004), the
essence of using governance theory is to understand
decision making and changing processes. The use of the
theory became necessary because it does not only explain
the phenomenon but gives advice providing insight that
could possibly improve the environmental governance of
the sector. …..

7. Literature Review contd.
In the oil and gas sector the need for proper
accountability in the operations of the sector will ensure
that results obtained is implemented for use of
expenditure and policy making (Dean, 1969). The
primary objective of public accountability in this aspect is
to diffuse tension, reduce ambiguity and to increase the
trust of the people on the governing body. The
explanation is that government according to Ogabido,
(2008), must be ‘citizens centred or people oriented’.

8. Literature review contd
• Therefore, for effective operations of every
administration there must be accountability. And as
postulated by Asogwa, Amoke and Obasi, (2000), public
accountability will involve the three mentioned aspect of
accountability and basically administrative accountability
which is expected to be pursued in the effective
management of the operations in the oil and gas
industry especially with the echelon.

9. Benefits of the study to operators in the oil and
gas industry
• For improved performance of the agencies operating in the
sector: To effectively carry out their oversight functions of
products circulation and prices regulations which will help
stabilize operations, prices and increase revenue to the
government coffers thereby reducing corruption and
corruptive tendencies in the industry.
• To harness proper financial disclosure of the proceeds
accrued from oil sales.
• For increased transparent accounting processes among the
agencies in the industry.

10. Methodology
• The study adopted a qualitative research design
approach which made it possible for Primary and
secondary sources of data collection method to be
used. The study concentrated on the oil and gas
industry but with particular interest in the downstream
sector of the industry and with specific reference to the
agencies directly involve in the production, prices
regulation and distribution of petroleum products.

11. Findings
• Based on the responses from the respondents, it was
agreed that accountability is imperative for effective
operations in the sector: and should be mandatory for
all because it simply signifies openness, integrity and
truthfulness in handling public affairs. It was also
confirmed that it should be a guiding principle before
considering to engage any public official be it in
government or the private sector.

12. Recommendation
• Undue politicization of appointments to favouritism in
license allocation and irregularities obtained in the
bidding process, have been found to be the reason
behind lack of accountability: we therefore recommend
a proper constitutional funding, adequate supervision of
the agencies responsible for regulating the sector’s
operations and proper designation of duties among the
agencies to avoid duplication of duties and
subsequently conflicts of interest within the sector.

13. Conclusion
• It is our contention in this study that all hands should be on
deck to achieve accountability in the oil and gas sector. Oil
is a very intimidating economic proceeds every aspect of it
is money in return therefore the temptation that revenues
from its sale maybe misappropriated is there: but with
proper accountability and adequate supervision of the
instruments and agencies in charge of the sector success
will be achieved.
• Accountability will reduce corruption and corruptive
tendencies.