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Cablegate: Nigeria: Neiti Briefs U/S Jeffery and Requests Assistance

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UNCLASSIFIED
SIPDIS

DEPT OF ENERGY FOR CAROLYN HAYLOCK AND GEORGE PERSON

E.O. 12598: N/A
TAGS: EPET ENRG ECON PGOV EAID NI
SUBJECT: NIGERIA: NEITI BRIEFS U/S JEFFERY AND REQUESTS ASSISTANCE

SENSITIVE BUT UNCLASSIFIED - NOT FOR DISTRIBUTION OUTSIDE USG

1. (SBU) SUMMARY: In a July 25 meeting, Nigerian Extractive
Industries Transparency Initiative (NEITI) officials briefed
visiting Under Secretary Reuben Jeffery and requested additional USG
assistance to strengthen the institution's capacity to implement
required audits of revenues and expenses in the gas and oil sectors.
NEITI has made strides since its creation and continued USG
assistance could increase transparency in Nigeria' soil and gas
sectors. END SUMMARY.

2. (SBU) Under Secretary (U/S) for Economic, Energy and Agricultural
Affairs Reuben Jeffery, the Ambassador, and Embassy staff met with
Nigerian Extractive Industries Transparency Initiative (NEITI)
Chairman Professor Assisi Asobie and NEITI Executive Secretary
Mallam Sa'eed July 25. The U/S acknowledged NEITI's leadership on
transparency and Asobie thanked the Embassy and USAID for its
continued support and expressed sincere gratitude for USAID's
assistance to civil society organizations (CSO) that were
instrumental in pushing EITI legislation through the National
Assembly. He urged USAID to work with CSOs to advocate for
implementation of NEITI at the state level. Sa'eed requested
additional USG assistance to train and support staff as a way to
strengthen NEITI's capacity to implement required audits of revenues
and expenses in the gas and oil sectors.

3. (U) Sa'eed asserted that in order to fight oil theft in the Niger
Delta, the GON needed to create a control mechanism to publish oil
sales, perhaps with description or source information, which would
include disclosure of the commodity buyer and shipment destinations.
The Ambassador offered to look for available models to address
supply and demand, perhaps aided by the use of electronic bills of
lading. Sa'eed reiterated NEITI's staff needs, reporting that the
institution had a staff of only 35, but needed about 75, and that a
lack of knowledge of how the extractive industries operated,
particularly oil and gas, slowed down the auditing process.

NEITI Background
---------------

4. (U) Nigeria signed on to the Extractive Industries Transparency
Initiative (EITI) in 2004 to boost its fight against corruption.
NEITI has recorded several achievements in its four years of
operations, such as commissioning and publishing (?) the first
comprehensive audit of the petroleum sector for the period 1999 to
2004. NEITI's future challenges are two-fold: 1)upgrade the
technical skills of current auditors, and recruit and retain
auditors and specialists with extractive industries experience; and
2)obtain appropriate assistance to develop a global
information-sharing database to capture oil sale information,
matching sales with delivery recipients.

5. (U) President Yar'Adua inaugurated the current NEITI board
January 29, 2008 in accordance with the 2007 NEITI Act. Its mandate
is to promote transparency and accountability in Nigeria's
management of revenues from the oil, gas, and mining sectors. The
oil sector provides 20 percent of Nigeria's GDP, 95 percent of
foreign exchange earnings, and about 80 percent of budgetary
revenues. A 2007 revision in NEITI's enabling legislation extended
its mandate to include examining the use of revenues from petroleum
and mineral sales, allowing a new focus on state-level expenditure
of oil proceeds.

6. (U) COMMENT: USG and other donor assistance continues to support
NEITI. The Embassy has initiated a NEITI Support Group, coordinated
by the World Bank, but NEITI could benefit from additional technical
assistance. A new National Stakeholder Working Group (NSWG), which
includes representatives from the extractive industries, civil
society, relevant labor unions, industry experts, and one member
from each of Nigeria's six geo-political zones, appears to be making
progress. END COMMENT.

PIASCIK

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