NIGERIA: DAS HENGEL VISITS EXTRACTIVE INDUSTRIES

UNCLAS ABUJA 001139 SENSITIVE SIPDIS DEPARTMENT FOR OES/EGC FOR WMOORE AND EEB/ESC/IEC/ENR DHENRY E.O. 12958: N/A TAGS: EPET ECON ENRG SENV EIND EINV TRGY TPHY NI SUBJECT: NIGERIA: DAS HENGEL VISITS EXTRACTIVE INDUSTRIES TRANSPARENCY INITIATIVE ¶1. (SBU) Deputy Assistant Secretary Douglas Hengel of the Bureau of Economic, Energy, and Business Affairs, met in Abuja on May 20 with the leadership of the Nigerian Extractive Industries Transparency Initiative (NEITI),accompanied by DCM, Econ Counselor and Deptoff. NEITI Chairman Asobie noted good cooperation with the Embassy and USAID. He stated that he shared DAS Hengel's concern that progress on EITI implementation and validation might be slowing, but noted that selection of a validator was complete. Nigeria was working toward achieving EITI validation by the next EITI Board meeting in Baku scheduled for November, but in any case Asobie was determined that NEITI would meet the March 2010 validation deadline. ¶2. (SBU) Outstanding issues which might affect the pace of progress towards validation include questions of whether mining revenues need to be included in the Nigerian validation effort - the original terms of reference apply only to the oil and gas sectors; whether full funding will be made available for the 2006-2008 audit, which was not yet provided for in NEITI's budget; and training and full funding for NEITI Secretariat staff in the coming months. Plans towards the GON FY 2010 budget include financial support for NEITI, but support provided by the U.K. aid agency DfID ended in May and NEITI is seeking bridge financing for the remainder of FY 2009. GON funding is already in place for the validation process itself. ¶3. (SBU) Asobie noted that NEITI was working on receiving reporting from state governments and to expand its regional presence within Nigeria. While the accounting reconciliation committee includes representatives from each state, NEITI would like to achieve greater clarity on revenues going into the Federation Account. While most oil and gas operators are providing data to NEITI, three (NFI) are still not providing audited reports. Currently, only lower-level officials of the Nigerian National Petroleum Corporation attend NEITI multi-stakeholder group (MSG) meetings; NEITI would like to have NNPC directors attend. NEITI also wants more engagement between companies, civil society groups, and government officials outside of regularly scheduled MSG meetings. NEITI had almost completed the process of engaging an outside consultant to recommend an appropriate metering and monitoring system to capture oil and gas flows. ¶4. (SBU) Comment: NEITI is presently coordinating closely with its major donors, particularly DfID and the World Bank, as it strives for EITI validation. Much will depend on support from the Presidency. NEITI has requested to brief the Federal Executive Council on its plans and needs for financial and staffing resources and intangible support. End comment. ¶5. (U) State/EEB and Consulate Lagos cleared this cable. SANDERS