Oil and Gas Accounting in the Nigerian Petroleum Industry

Abstract

This study is aimed at assisting accounting practices operated in the oil and gas industry in Nigeria particularly to examine the major problems of accounting in the Nigerian oil industry. Also, attempt was made, to assess the role of Nigerian Accounting Standard Board (NASB), the Institute of Chartered Accountants of Nigeria (ICAN)  and the Association of National Accountants of Nigeria (ANAN) in developing relevant accounting standards for the industry. Data was collected using both primary and secondary sources with the aid of structured questionnaire. Simple percentages and Chi-square Statistical models were used to analyse the data. It was found that accounting standards for oil and gas industry in Nigeria owe its origin to the methods initially formulated in America and Britain with slight modifications. It was also observed that NASB, ICAN and ANAN play significant role in formulating standards for the oil and gas accounting sector in Nigeria to suit the realities of the time. It was recommended that oil and gas companies in Nigeria irrespective of their origin should show unequivocal commitment in adopting and upholding ethical standards that would lead to improvement in accounting information. The Nigeria National Petroleum Corporation (NNPC) and oil companies should relate functionally with statutory institutions like ICAN, NASB and ANAN with a view to fostering a stronger working relationship.

Keywords: Accounting for oil and Gas