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

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. 

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.