Petroleum Institutions

5. Finance ministry

In almost all states there are certain tasks that fall exclusively within the traditional competence of a ministry of finance. These usually include:

In a number of states, petroleum royalties are assessed and collected by the petroleum sector ministry especially where there are issues of measurement of quantities or verification of prices which require specific extractive industries sector technical expertise.

All of these functions, however, depend on an accurate understanding of the petroleum sector and require close coordination between the finance and petroleum sector ministries and NOCs. Unfortunately, this coordination is typically weak or entirely lacking. Good practice would recommend establishment of a small professional unit within the finance ministry that is well-grounded or trained in sector economics and operations and able to deal with EI sector agencies on an equal footing and, therefore, ensure coordination.