The North is poor, this much no one disputes, the poverty has bred millions of destitutes, who have become instant and easy recruits for Boko-Haram. But the question is: Who impoverished the North? I want to posit that the Core North through their aristocrats and ex-military rulers rake an enormous income from oil money (from the Niger Delta) individually, much more than any Individual/group of individuals from the South, and collectively more than 10 times the entire Niger Delta business men in the oil and gas industry put together.
In this disquisition, I have attempted to show that an estimated 75% of
crude oil and gas produced by indigenous companies is controlled by the
North. It is an area they have well conquered through General IBB, Abacha
and Abdulsalami. However, the loots never get back home. In this first
part I will attempt to describe the very uneven nature of the distribution
of the nation’s wealth among the Northern aristocratic families and their
military generals who for decades looted Nigeria. They did so blatantly,
and while Nigeria was weeping about oil windfall loot and others, Nigerians
would wail if they know how much of the nation’s resources these folks
allocated to themselves and their business fronts before they stepped aside.
Let us therefore begin.
To the state of origin of Boko Haram: Borno State.Enter Cavendish Petroleum,
the operators of OML 110 – with good yielding OBE field. This oil block
was awarded to Alhaji Mai Deribe – the Borno patriarch, who even in death
will remain the richest man dead or alive in the history of Borno state-
by General Sani Abacha on the 8th of July, 1996. OML 110 has a proven oil
reserve in excess of 500 million barrels (More than the entire 300milliom
barrels reserve of Sudan). As yet with the capacity to produce about 120,000
barrels of crude oil daily from its OBE 4 and OBE 5 wells .At current production
levels, the Mai Deribes net circa N4billion monthly in crude oil sales
(Using oil price estimates of $100 p/b). Mai Deribe’s mansion, in allegedly
poor Maiduguri is one of the most lavish mansions anywhere on earth; it
used to be a tourist attraction, b4 Boko Haram’s tourism deterrent activities
-I will then shift to the centre of the Fulani aristocratic hegemony in
the North – Kano.
Here. Enter the Fulani Prince Nasiru Ado Bayero, Mallam (Prince) Sanusi
Lamido Sanusi’s cousin. He is a Key shareholder and director in Seplat/Platform
petroleum operators of the Asuokpu/Umutu Marginal Field with a capacity
of 300,000 barrels monthly and A 30mmfcsd gas plant capable of feeding
100MT of LPG. The Ado Bayeros, Yar’Aduas and Atiku Abubakar are Nigerian
holders of Intels. It runs a private port that has grounded three Federal
ports in the South. Intels is discussed later. Enter South Atlantic Petroleum
Limited (SAPETRO). South Atlantic Petroleum (SAPETRO) is a Nigerian Oil
Exploration and Production Company that was created in 1995 by General
T. Y. Danjuma (also Chairma of ENI Nigeria). General Sani Abacha awarded
the Oil Prospecting License (OPL) 246 to SAPETRO in February 1998. The
block covers a total area of 2,590km2 (1,000 sq. miles). SAPETRO partnered
with Total Upstream Nigeria Ltd (TUPNI) and Brasoil Oil Services Company
Nigeria Ltd (Petrobras) to start prospecting on OPL246. Akpo, a condensate
field was discovered in April 2000 with the drilling of the first exploration
well (Akpo 1) on the block. Other discoveries made on OPL 246 include the
Egina Main, Egina South, Preowei and Kuro (Kuro was suspended as a dry
gas/minor oil discovery). In June 2006, General TY Danjuma divested part
of its contractor rights and obligations to China National Offshore Oil
Corporation (CNOOC) for $1 billion (N160bn). Akpo exports about 230,000
barrels of condensate daily.
Condensate export is not regulated by OPEC, so SAPETRO/TOTAL exports as much as possible each day. Egina exports about 75,000 barrels of oil daily.Therefore, Akpo and Egina fields export just over 300,000 barrels of oil/condensate daily (three times what the country Ghana exports). SAPETRO (TY Danjuma) get’s 25% of this. Now, note I have not talked about the gas component – it’s about 2.5 trillion cubic feet. The money SAPETRO nets each month is more than the monthly statutory allocation to any Nigerian state and also more than the oil revenue of Ghana. Do your math. Enter AMNI (or is it AMIN?) International Petroleum Development Company. AMNI owns two oil blocks – OML 112 and OML 117. In the production-sharing contract, AMNI gets 60% for owning the oil block and Total gets 40% for providing technical advice. OML 112 was awarded on the 12/02/1998 while OML 117 was awarded 04/08/1999 all by Gen. Abdulsalami Abubakar. Operations started on both blocks 0n 26/02/2006. The licenses are due to expire 11/02/2018 and 05/08/2019 respectively. (Now you see why the next election is important?).
The Okoro and Setu fields in OML 112 are operated by Afren Energy, a company
substantially controlled by Rilwanu Lukman. The Okoro and Setu oil fields
have about 50 million barrels in reserve and currently produce/exports
just a little below 20,000 barrels per day. The chairman of AMNI International
Petroleum and Development Company is Alhaji (Colonel) Sani Bello a Fulani
from Kontagora, Niger State. Lest I forget, Alhaji Bello’s son- Abu, is
married to General Abdusalami Abubakar’s eldest daughter. Enter Oriental
Energy Resources Limited, a company owned by Alhaji Mohammed Indimi, a
close friend of General Ibrahim Babangida. Also worthy of note is that
General IBB’s first son is married to Alhaji Mohammed Indimi’s daughter
– Yakolo Indimi-Babangida, who also serves as a director in the company.
Alhaji Indimi hails from Niger State.
Oriental Energy Resources Limited runs three oil blocks: OML 115, the Okwok
field and the Ebok field. OML 115 and Okwo are OML PSC, while Ebok is an
OML JV. All of them crown offshore oil blocks. OML 115 on its own is 228
sq Km. On OML115 Oriental Energy Resources Limited has 60 per cent while
Equity Energy Resources AS, which Alhjai Aliko Dangote’s oil and gas investment
vehicle has 40 per cent (Aliko Dangote is from Kano). On Okwok, Addax has
40% and on the Ebok field, Oriental Energy Resources shares with none:
its 100%. AMNI produces twice as much as Cavendish Petroleum. Enter Express
Petroleum and Gas Limited floated by Alhaji Aminu Dantata, solely for the
purpose of fronting for winning oil block(s) even though he and the company
are in no way qualified for the award. General Abacha awarded him OML 108
on the 1st of November, 1995. CAMAC Houston, a company owned by Kase Lawal
bought 2.5% of Express Petroleum’s 60% holdings. The other 40% on OML 108
is owned by Sheba E&P Limited an IBB tributary company.
SEPCOL operates the Ukpokiti offshore field in Shallow water Nigeria, which was acquired from ConocoPhillips in May 2004. Enter Shebah Exploration And Production Limited (SEPCOL) . It is the operator of the Oil Mining License 108 offshore Nigeria. Head office is in Lagos, but ‘head quartered’ in Minna.
Enter Consolidated Oil. Conoil Producing Limited is an integrated upstream
oil and gas company. They are the operator of six blocks in the Niger Delta
as well as 25% Equity holder in the Joint Development Zone (JDZ) Block
4. Corporate Head office is in Lagos, but its ‘Headquarters’ is in Minna,
Niger State. Conoil signed a technical operator agreement with Continental
Oil and Gas Limited (CONOG) to provide 100% funding and technical service
agreement to operate blocks OML 59 on a 40% (Conoil) / 60% (CONOG) basis.
Conoil entered into a Production Sharing Contract with the NNPC by virtue
of an agreement executed on 17th October 2008. Conoil’s has overall potential
hydrocarbon resources of over 1.0 Billion Barrels of Oil and 7.0 Trillion
Cubic Feet of Gas. General Ibrahim Babangida (IBB owns a substantial interest
in conoil held in blind trust [same arrangement in Glo] ) awarded the first
oil block to Conoil in 1991. The company produces about 100,000 barrels
per day.
Enter Rilwanu Lukman, another Fulani multimillionaire with fronted controlling
holdings in Afren, the operators of AMNI oil blocks and also with very
key interest in the NNPC/Vitol trading deal, Vitol is a London based oil
trading company. Vitol lifts 350,000 barrels of crude oil daily from Nigeria.
Enter Intels and the Yar’Adua , Ado Bayero family and Alhaji Abubakar Atiku. The Oil and Gas Free Zone and Oil Services Centres, as well as Support Bases, are operated from government-owned facilities, leased to Intels under long-term agreements. Intels runs a ‘private port’, a venture that has systematically killed the Calabar, Warri and Port Harcourt ports. There are over one hundred major companies operating at the Intel facility in Port Harcourt. The company makes more money in profit than the government of Rivers, Bayelsa and Delta states put together. I shall give details and figures in the part two of this disquisition.
Finally, for the Part I of this disquisition, I introduce you to NorthEast
Petroleum. The name is as clear as the message it sends. I do not need
to write so much about NorthEast Petroleum registered as NorEast. NorthEast
Petroleum Nigeria Limited is the holder of OPL215 license, covering an
area 0f 2,564 square kilometres in water depths between 200 to 1600 metres.
NorEast is the parent company of Rayflosh Petroleum was awarded the blocks
OPLs 276 & 283 closing thereupon a Joint Venture Agreement with Centrica
Resources Nigeria Limited and CCC Oil and Gas. Not surprising, NorthEast
Petroleum is owned by another Fulani businessman from the North East, Alhaji
Saleh Mohammed Jambo. The license was awarded to him by General Ibrahim
Badamosi Babangida in 1991 and then renewed in 2004. So far $50Million
has been spent on the very promising Okpoi-1 and Egere -1 exploratory well.
In the Part II, we shall finish the discussion. We will table other North Eastern billionaires who make more money than their states of origin from Niger Delta oil blocks. Sadly, National Bureau of Statistics reports from 2010 show Niger State as the poorest state in the Federation, and the North East the poorest region. With these figures from the National Bureau of Statistics, I rest my case
Insight: Nigeria oil corruption highlighted by audits
|
By Joe Brock and Tim Cocks
ABUJA/LAGOS |
Thu Mar 8, 2012 5:28am EST
(Reuters) - Jolted by a public outcry since the start of the year,
Nigeria's government has announced a series of measures to address oil
industry corruption in the world's eighth biggest producer. It is an
issue that may come to define Goodluck Jonathan's presidency.
An important supplier to the
United States because of the oil's high gasoline content, Nigeria has
attracted billions of dollars of investments from the world's top oil
companies. Yet poverty in Africa's second biggest economy is rising,
with almost 100 million people living on less than $1 a day, data
released last month shows. The percentage of Nigerians living in
absolute poverty - those who can afford only the bare essentials of
food, shelter and clothing - has risen to around 60 percent.
Two
recent audits of the oil industry reviewed by Reuters show billions of
dollars in irregularities despite years of government promises to clean
it up.
In January hundreds of
thousands of Nigerians took part in the biggest protests in the history
of Africa's most populous nation. Sparked by a hike in state-subsidized
petrol prices, the protests were fuelled by anger at the graft that has
for decades channeled oil wealth into the pockets of a minority.
Corruption has left oil-dependent Nigeria unable to cater for its basic
health, infrastructure or education needs.
Goodluck
Jonathan won a presidential election last year that observers said was
Nigeria's cleanest since the end of military rule in 1999. Many voters
had hopes that he would root out corruption. Amongst the actions
announced by Oil Minister Diezani Allison-Madueke in January was the
hiring of two accounting firms to audit the industry.
But
even as the minister was announcing the new measures, auditors working
for the Nigeria Extractive Industries Transparency Initiative (NEITI) - a
government-funded watchdog - were winding up another investigation into
the oil industry. That study, examining the period 2006-2008, was sent
to the relevant government authorities at the end of January. A copy
reviewed by Reuters is likely to add to the pressure on Jonathan for
reform. It lists discrepancies and shows billions of dollars missing
from Nigeria's oil revenues.
THE MISSING BILLIONS
Getting
a clear picture of how much money Nigeria has lost to corruption over
the years is almost impossible. The system is hemorrhaging cash in so
many places that accountants often struggle to make sense of it all. The
state oil firm, Nigerian National Petroleum Corporation (NNPC), does
not measure its output. The government estimates that average output is 2
million to 2.6 million barrels of oil a day, making Nigeria Africa's
biggest producer.
"Right now, no
one can tell you exactly how much of our crude is extracted from our
soil," said Orji Ogbonnaya Orji, who sits on the board of directors of
NEITI. "We depend on records from the oil companies. That clearly has to
change."
The NEITI audit shows
some startling gaps: $540 million missing from $1.675 billion in
signature bonuses - these are advance payments to develop fields, a
standard producer country demand. Then there's 3.1 million barrels of
oil missing from NNPC declarations about its joint ventures compared
with the figures released by NNPC's international partners. That equates
to 0.25 percent of the output. NNPC also received $3.789 billion in
dividends from Nigeria LNG, a liquefied natural gas venture over the
2006-2008 period, but there is no record of those dividends being paid
into the federal accounts.
An NNPC
spokesman did not respond to requests to explain the irregularities
listed in the report in detail. The firm denies malpractice. When asked
about corruption last month, NNPC managing director Austin Oniwon
replied that the issue was overblown. "Corruption in NNPC is in the
imagination of some people," he said.
The
NEITI report says foreign oil majors may have underpaid royalties "of
$2.33 billion arising from subjective interpretation of volume,
pricing," and grading variables. "We are questioning the basis of those
calculations," Orji explained. "They are not calculated on the basis of
empirical fact. And there is connivance by officials."
Foreign
firms also seemed to have underpaid petroleum profit tax by over $1
billion, NEITI said. The report recommended a review of the tax returns
of Chevron and Exxon Mobil. Exxon officials were not immediately
available to comment. A Chevron spokesman said the firm "complies with
all laws and regulations in the locations where we operate, as a matter
of long-standing policy Chevron does not release specific financial
details."
The NEITI audit has only
just been delivered to the government. Another audit, this time by KPMG
and focusing on the state oil firm, was delivered to the oil ministry
in Nov 2010. The government has not published it. A copy reviewed by
Reuters shows similar practices. It notes that NNPC invoices for
domestic crude in U.S. dollars but pays the government in naira and that
"exchange rates used by NNPC were lower than (those) ... published by
the CBN (central bank)", causing a loss of 86.2 billion naira ($550
million) to the treasury from 2007 to 2009.
KPMG
also said fuel subsidy claims were based on unverified declarations of
fuel imported or refined rather than actual retail sales at pump
stations. Analysts say this highlights a scam: fuel import ships -
operated by private importers, not just the NNPC - are declared full in
order to claim subsidies but are really half empty, having sold to
Nigeria's neighbors where prices are higher.
"Some
of the issues that were revealed were shocking," the head of the House
of Representatives fuel subsidy probe, Farouk Lawan, said. He added
government officials had understated NNPC payments by billions of naira.
Daily consumption of petrol is 35 million liters, yet importers were
being paid for 59 million liters a day.
"That
means subsidy is being paid on 24 million liters but is not being
consumed by Nigerians," he said. "Either those products were not brought
in or they were brought in and diverted or ... smuggled out. Most
likely a combination."
Asked about
the KPMG report in January, President Jonathan pointed out that he had
set the investigation in motion. "If there are queries, we further those
queries to them (the NNPC) to answer. If people have been found to be
corrupt, the law will take its own course."
INVESTIGATION, INACTION
At
Nigeria's annual oil and gas conference in Abuja at the end of last
month, oil men traded business cards with Nigerian politicians. The talk
was all optimism, offshore oil platforms and new pipeline technologies.
"Corruption is on everybody's minds but nobody's lips," said Bismarck Rewane of Lagos consultancy Financial Derivatives.
Asked
at the conference about corruption, Oil Minister Allison-Madueke said
the government was "mindful of the challenges still within the sector
... financial leakages and other deep-rooted inefficiencies," and that
"there is undoubtedly a need for change."
Nkem
Onyikawa, managing partner of one of the firms involved in a new oil
audit, Sada, Idris and Co. said the work would be finished within nine
months. Allison-Madueke has also set up three committees to look into
bottlenecks to oil reform, including one to hurry up an oil bill seen as
vital to transparency that has been stuck for years.
"Several
panels and committees have been set up to reform the petroleum
industry, and over the years many of these efforts have been stalled,"
Allison-Madueke said in a recent speech.
Graft
has not deterred oil firms from doing business in Nigeria. Last month
Exxon signed a 20-year license on a field that makes up nearly a quarter
of Nigeria's output.
A foreign oil
executive summed it up thus: "Ideally what you want is a clean and
transparent oil business, but failing that you want a business where you
know the rules and how to play by them."
Last
week James Ibori, the former governor of an oil-producing state,
pleaded guilty in a London court to corruption, a development many
Nigerians welcomed but which highlighted something: No such successful
prosecution of a senior figure has happened on home soil. ($1 = 157.7300
naira)
(Additional reporting by Camillus Eboh in Abuja; Writing by Tim Cocks; editing by Jane Baird and Janet McBride)
(This story was corrected to remove reference to Bayelsa state in final paragraph)