Guidance on the sale of the state's share of production or other revenues collected in kind (4.2), including commodity trading

Guide › Requirement 4 › Sale of the state's share of production or other revenues collected in kind (4.2)

Where the sale of the state’s share of production or other revenues collected in kind is material, the government, including state-owned enterprises, are required to disclose the volumes sold and revenues received. 

See requirement 4.2 in full
Guidance on establishing materiality of revenues
Guidance on SOEs

What are in-kind revenues?

One of the key objectives of the EITI is to shed light on the return that a country gets in exchange for its oil, gas and minerals.

In many resource-rich countries, payments by companies to the government for rights to extract resources happen in-kind, meaning through physical transfers of oil, gas and minerals, rather than transfers of money. Physical revenues can also occur because the state or a state-owned enterprise (SOE) owns shares in a producing license.

What is commodity trading?

The state or the SOE sells the above mentionned physical resources (in-kind revenues), often to trading companies or domestic refineries. They trade the commodities against cash.

In order for governments implementing the EITI to fully account for all revenues received from natural resources, it is therefore necessary to know how much revenue the state or SOE gets from the sales of these resources as well as whether these sale proceeds are transferred to the budget.  

Page on commodity trading, including country examples and links to more resources

Related guidance notes

There is guidance related to requirement 4.2.: on commodity trading (currently only covering oil trade), establishing materiality and on state participation in EITI reporting, see below.

Guidance note 26 - Reporting on first trades in oil

Published Date: 
May, 2017
Publisher: 
EITI International Secretariat

Relates to requirement 4.2

Download guidance noteDownload reporting template in excel (direct download)

This guidance is also available in French (see attachments below

This guidance note is the first effort by the EITI Working Group on Transparency in Commodity Trading to assemble guidance on ‘first trade’ reporting in oil. The guidance has three intended audiences: first, the EITI MSGs in implementing countries that will determine their respective country’s approach to reporting in this area;

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EITI Guidance note 13

Guidance note 13 on defining materiality, reporting thresholds and reporting entities

Published Date: 
March, 2016
Publisher: 
EITI International Secretariat

Requirement 4.1

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A fundamental element of the EITI is the disclosure of payments and revenues from oil, gas and mining. All implementing countries are required to disclose information about how much extractive companies pay in taxes, royalties and other payments and how much the government agencies have received. 

This data has to be comprehensive, i.e. give the reader a complete picture of the total revenues received from natural resources.

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Guidance Note: EITI Requirement 2.6

Published Date: 
October, 2020
Publisher: 
EITI International Secretariat

State participation and state-owned enterprises

This guidance note refers to the 2019 EITI Standard

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State-owned enterprises (SOEs) play important roles in exploiting natural resources and managing the extractive sector. While some are commercial or operational companies —selling crude oil or raw minerals, managing state equity or participating directly in extractive operations — others are regulatory or administrative entities or instruments of economic or state development. 

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Validation of this requirement

See Validation Guide, section 4.2 - In-kind revenues

Case studies, new and events

See commodity trading page
Blogs, news, events related to commodity trading

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