Revenue Mobilisation Allocation and Fiscal Commission (RMAFC) has reopened the verification of disputed and newly drilled oil and gas wells from 2017 to date, following complaints by states over the accuracy of well coordinates and their impact on revenue allocation.
The Commission has also discarded the previous draft report on the exercise after receiving claims, counterclaims and complaints from various states.
The fresh exercise is significant because the location and status of oil and gas wells can affect the allocation of the 13 per cent derivation fund to oil-producing states.
To conduct the new exercise, RMAFC has inaugurated a reconstituted Inter-Agency Technical Committee made up of officials and experts from the Commission, the Office of the Surveyor-General of the Federation (OSGoF), the National Boundary Commission (NBC) and the Nigerian Upstream Regulatory Commission (NUPRC).
The committee was inaugurated in Abuja by the Chairman of RMAFC, Dr Mohammed Bello Shehu, who said the exercise was necessary to address outstanding disputes and improve the accuracy of revenue allocation.
Shehu said the verification was part of RMAFC’s constitutional responsibility to monitor revenue accruing to and distributed from the Federation Account.
He said the exercise would also help ensure that the 13 per cent derivation fund was distributed to the appropriate oil and gas-producing states.
The RMAFC chairman explained that the Commission had decided to abandon the earlier draft report because of several complaints from states concerning disputed and newly drilled wells.
According to him, one of the major issues was the need to establish the correct coordinates of the wells and ensure that the coordinates were properly plotted on approved maps.
“The concerns centred largely on the need to re-verify the coordinates of disputed and newly drilled wells and accurately plot the verified coordinates on approved maps,” he said.
Shehu directed the new committee to take relevant court judgments into consideration and rely strictly on approved maps during the exercise.
He also instructed the team to conduct physical inspections of affected wells where necessary so that the findings would reflect the actual situation on the ground.
The Commission has established a two-level structure for the exercise in an effort to strengthen the technical process and oversight of the verification.
The first level will be handled by technical officers and specialists from the four participating agencies. Their responsibilities will include field inspections, verification of coordinates, technical analysis and preparation of an initial report.
The second level will be an Executive Committee led by the leadership of RMAFC. It will provide overall direction, coordinate the participating agencies and supervise the approval of the final findings before they are submitted for formal ratification.
The arrangement brings together institutions with responsibilities covering revenue allocation, surveying, boundary matters and regulation of upstream petroleum operations.
RMAFC also said security support would be provided for field operations, particularly in areas where access could be difficult because of their location or security conditions.
Shehu said the Commission would work with relevant security authorities to obtain the necessary clearances and provide tactical and security support for the field teams.
Surveyors-General from the affected states and representatives of the Senate Committee on Petroleum Resources (Upstream) are also expected to participate as observers.
Their participation, according to the Commission, is intended to increase transparency during the verification process.
The exercise comes amid the long-standing importance of derivation revenue to oil-producing states, which receive 13 per cent of mineral revenue under Nigeria’s revenue-sharing arrangement.
Disputes over the location of oil and gas wells can therefore have financial implications for states where the wells are located, particularly where the proceeds determine which state qualifies for derivation payments.
The new verification is expected to establish a clearer technical record of the disputed wells and provide a basis for resolving disagreements among the affected states.
Shehu urged members of the committee to carry out the assignment objectively and with integrity, saying the goal was to bring greater clarity and fairness to disputes involving oil and gas wells.
He expressed confidence that the process would improve the credibility of revenue monitoring and allocation.
The Secretary of RMAFC, Comrade Tosin Adeyanju, also urged members of the committee to put the national interest ahead of other considerations.
Adeyanju called for fairness, diligence and objectivity, noting that the committee’s work would attract close scrutiny because of the problems encountered in previous verification exercises.
He expressed confidence that the reconstituted committee would produce findings that would be acceptable to the country and the affected states.
The exercise is expected to culminate in a new technical report after the disputed well coordinates have been reviewed, field inspections conducted where required and the relevant maps and legal decisions considered.
The final findings will subsequently go through the Commission’s approval and ratification process before they can serve as the basis for any consequential revenue allocation decisions.
SOURCE: The Nation Nigeria