Nigeria: The Scandal of Nigerian Oil Block OPL 245
25 November 2013 How secrecy in the oil & gas sector and the use of anonymous shell companies led to hundreds of millions of dollars being diverted away from Nigeria's citizens and into the hands of a convicted money-launderer.
The Story
In May 2012, Global Witness pieced together detailed court documents and other evidence that exposed how Nigerian subsidiaries of Royal Dutch Shell and Italian oil giant Eni agreed to pay US$1.092 billion for one of Nigeria's most lucrative oil blocks, OPL245.
The payment was made by Shell and Eni to the Nigerian government who had a separate agreement to pay the same amount to Malabu Oil and Gas, a company widely believed at the time of the payments to be controlled by convicted money-launderer[i] and former oil minister Chief Dan Etete.
In July 2013, a British High Court ruled[ii] that Etete was indeed the owner of Malabu Oil & Gas.
As Etete had awarded the oil block to Malabu Oil and Gas whilst oil minister during the regime of the corrupt dictator General Abacha, he had effectively given himself one of the most lucrative oil blocks in Nigeria[iii].
Shell and Eni deny paying any money to Malabu Oil and Gas[iv]. However, High Court proceedings and other evidence seen by Global Witness reveal that, in reality, Shell and Eni were aware and in agreement that the deal was for the benefit of Malabu, and had even met with Etete face-to-face on several occasions.
In fact, testimony heard during the case indicates that an official from Shell previously negotiated directly with Etete over "iced champagne" and that Eni officials had enjoyed a luxurious dinner at a 5-star hotel in Milan with him[v].
Global Witness believes that the deal was structured primarily to allow Shell and Eni to claim that they had not struck a deal with Etete nor Malabu.
Yet in making these payments, Shell and Eni effectively bought the block from Etete for over a billion dollars, therefore 'monetising' an asset that was acquired by Malabu Oil and Gas in highly suspicious and possibly illegal circumstances.
Documents seen by Global Witness indicate that over US$801 million of the money transferred to Malabu Oil & Gas was later transferred to a further five shell companies with hidden owners, raising concerns as to who truly benefitted from this deal.
Why transparency matters
Despite Nigeria's abundant oil wealth, Nigerians remain amongst the world's poorest people. In a country that continues to be plagued by corruption, the need for citizen oversight of payments to governments for their natural resources is as important as ever.
Currently, as this case demonstrates, detailed information of this nature only comes to light through the accident of court cases in London and New York. Had these court cases not gone ahead this information may never have fully come to light.
In order to prevent opaque deals like this, extractive companies must make all payments made to governments public.
Shell and Eni must also publicly disclose full details of all the arrangements they made with the Nigerian government with respect to these payments.
Given the history of this block and Etete's involvement, Shell and Eni should explain what steps they took to ensure their payments did not end up in the hands of Etete's company, Malabu. It would be extremely unlikely that Etete's history was not known to sophisticated international companies who, in Shell's case, have operated in Nigeria for more than half a century.
The need for a global transparency standard
New laws in the U.S. and EU now require extractive companies like Shell and Eni listed there to report payments they make to governments for natural resource deals, on a country-by-country and project-by-project basis.
This new global standard allows citizens of resource rich countries to identify what deals are being made on their behalf for their natural assets like the oil block OPL245.
Shell and other companies should stop attacking these laws and start reporting all their payments to governments to help prevent corruption.
A deal like the one finally struck for OPL245 would have been difficult to broker had the real owners of Malabu Oil and Gas been made public from the outset.
However, the real owners of Malabu and the shell companies that received millions of dollars as a result of the deal were kept secret. Hidden company ownership allows for the large scale state looting and affords impunity to the perpetrators.
Global Witness is pushing for the disclosure of the real owners of companies to be a prerequisite for participation in extractive deals.
[i] Etete was convicted of money laundering in France in 2007.
[ii] Energy Venture Partners Versus Malabu Oil & Gas, Commercial court, Queen's Bench Division, 2011-13. The case was brought by a broker who alleged that Etete failed to pay him for work he had done in obtaining a buyer for OPL245. Shell and Eni were not part of these proceedings.
[iii] After General Abacha died in 1998, the administration of Nigerian President Obasanjo revoked Malabu's licence and awarded it to Royal Dutch Shell, but after much legal wrangling a Nigerian court re-awarded the licence back to Malabu in 2006.
[iv] The Economist, "Safe sex in Nigeria", 15 June 2013. http://www.economist.com/news/business/21579469-court-documents-shed-light-manoeuvrings-shell-and-eni-win-huge-nigerian-oil-block; Eni correspondence with Global Witness, October 2012.
[v] Energy Venture Partners Versus Malabu Oil & Gas, Commercial court, Queen's Bench Division, 2011-13. The case was brought by a broker who alleged that Etete failed to pay him for work he had done in obtaining a buyer for OPL245. Shell and Eni were not part of these proceedings.
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Nigeria: Dangote Signs U.S.$9 Billion Deal to Build Oil Refinery, Petrochemical Complex
By Emma Ujah and Ben Agande, 5 September 2013 More on This
Nigerian Tycoon Signs Deal to Build Oil Refinery
Aliyu Dangote Abuja — The Dangote Group Wednesday made history by signing of a combined $ 9.05 billion facility agreement with a consortium of local banks and international investors for the establishment of a refinery, and petrochemicals cum fertilizer complex in Nigeria.
Agreement
Under the agreement signed at a crowded ceremony in Abuja, a $ 3.3 billion medium term loan will come from local banks and international finance organizations; $2. 25 billion from the Economic Commission for Africa, ECA, and Dangote's equity contribution of $3.50 billion.
The Central Bank of Nigeria, CBN, also made a contribution of N50 billion with interest rate of 7 per cent to be repaid in 15 years.
Chairman of the group, Alhaji Aliko Dangote, described the complex to be located at the OK-LNG Free Trade Zone, between Ogun and Ondo states, as the largest industrial complex in Nigeria's history and that he embarked on the project as a demonstration of his confidence in the Nigerian economy.
His words: "As an investor who believes in Nigeria, knows Nigeria well and whose prosperity was made in Nigeria, we have responded to the challenge with our decision to invest $9 billion in a refinery/petrochemical and fertilizer complex to be located at the OK-LNG Free Trade Zone. This complex will be the largest industrial complex project ever in the history of our great nation."
Lauds Jonathan
He commended President Goodluck Jonathan's administration for creating the enabling environment for businesses to thrive in the country, saying "We are happy to inform your excellences that because of the improvement in the enabling environment for investment created during this present government's tenure we have had excellent response from the international finance organizations and today we are here to sign the agreement for the medium term loan of $ 3.3 billion."
Dangote said the project had effectively taken off, with the award of the Engineering, Procurement and Construction, EPC, contract to Saipem of Italy for the fertilizer plant, noting that the Basic Engineering Design and optimization for the refinery had also been awarded.
When completed, the chairman said, the fertilizer plant would produce 2.75 metric tons per annum of Urea and Ammonia; while the refinery would process 400,000 barrels of crude oil per day.
We 'll produce high grade petrol --Dangote
He said the refinery would produce a higher grade of Premium Motor Spirit, PMS, popularly known as petrol, compared to imported ones, saying "in addition to high grade petrol, the refinery will produce: diesel, aviation fuel, household kerosene, slurry as raw material for carbon black, as well as 650,000 metric tons of polypropylene per annum. Our mission is to through industrialization, reverse the historical trend of the export of foreign exchange and jobs and replace it with foreign exchange conservation and job creation."
Dangote added that the recent discovery and development of the shale oil and gas in "our traditional markets has further stressed the urgent need for us to diversify our economy on a fast track to avoid a reversal of the current steady improvement in all indices of economic performance."
FG's transformation agenda working--Sambo
Speaking, Vice President Namadi Sambo, called on other rich Nigerians to emulate Dangote who had invested in several sectors of the Nigerian economy as a demonstration of its confidence in the Nigerian economy.
Sambo said: "Let me use this medium to call on other prospective investors to take a que from the Dangoste group by seizing the opportunities offered by our various investment incentives; our economic policies, adequate market size, vast natural resources, arable land, labour capital and friendly environment to invest massively in Nigeria. We remain the number one investment destination in Africa and indeed all over the world. We are resolute in our effort to offer all the necessary support and encouragement for the private sector to thrive. The transformation agenda and the Vision 20:2020 cannot be actualized without the active participation of the private sector.
"The administration of President Goodluck Jonathan has made significant inroads in the creation of the enabling environment for private sector investment. This ceremony underscores and it is indeed a testimony of the positive mark our policy measures and directives are making in stimulating private sector investment both from within and outside our country."
The vice president said that the Dangote complex would go a long way to reduce products costs , increase industrialization and improve the general well-being of the people, particularly farmers who had been yearning for fertiliser to boost outputs.
He said with the coming on stream of the refinery and the petrochemical plant, "Nigeria will reclaim its place of pride as one of the largest exporters of fertilizer, refined products and other petrochemical products, to consolidate on its efforts in ensuring the rapid development and the contribution of Africa to the global economy."
CBN to subsidise refineries
The CBN Governor, Sanusi Lamido Sanusi, who announced that the N50 billion cheap loan had been made available to Dangote for the complex, said that the institution was prepared to support the real sector of the economy by providing subsidies to create wealth across various sectors.
He said that the complex deal was made possible through "the culmination of the results of the various reforms that the CBN carried out under Professor Charles Soludo and himself to strengthen Nigerian banks to make them big enough to finance mega projects.
Sanusi addede that the the facility was "a demonstration that Nigerian banks are lending to the real sectors of the economy", adding, "lending to the agricultural sector has jumped by about 600 per cent since 1999."
Petroleum Minister speaks
On her part, Minister of Petroleum, Mrs. Diezani Alison-Madueke expressed satisfaction with Dangote's decision to establish one of the largest private refineries in the country and called on other investors to move into the sector as "Nigeria has the capacity to take more of these."
In the same vein, the CEO of Standard Chartered Bank in Nigeria, Ms Bola Adesola, said: "Standard Chartered is proud to support the Dangote Group in a project which will significantly boost Nigeria's economic productivity and create valuable jobs with specialist skills from key growth sectors. This project is an historic example of self-empowerment and leadership for the continent as a whole - and is made possible through effective partnerships between the Nigerian private sector, Government and international financial institutions. Standard Chartered remains committed to being here for good in Nigeria, and the region."
Largest syndication by banks --Agbaje
The Managing Director of Guaranty Trust Bank Plc, Segun Agbaje said: "This is the largest syndication by Banks in Nigeria and it is being undertaken with the knowledge that the successful implementation of Dangote Refinery and Fertilizer project will have far reaching implications for Nigeria's economic growth."
Other participating banks are Access Bank Plc, Zenith Bank Plc, Ecobank Nigeria Limited, Fidelity Bank Plc. First Bank Nigeria Limited, Standard Bank of South Africa Limited, UBA Plc, FirstRand Bank, First City Monument Bank Plc and Diamond Bank Plc.
Jonathan lauds Dangote
Meanwhile, President Goodluck Jonathan pledged that his administration will continue to implement policies that will continuously improve the operating environment for entrepreneurs and investors in the Nigerian economy.
Speaking at an audience with the President of the Dangote Group and leading Nigerian investors and bankers, President Jonathan said that his administration was fully committed to progressively removing all impediments to investment in Nigeria such as inadequate infrastructure and unsteady power supply.
The President lauded plans by Dangote Group to build Africa's largest refinery, petro-chemicals and fertilizer manufacturing complex in Nigeria and thanked the consortium of banks who are providing a $3.3 billion credit facility for the project.
According to him, "we are pleased that you are now investing in refining, petro-chemicals and fertilizer production. It is the downstream sector of oil and gas that can really create many jobs. Your interest and investment in that area will help in the area of job creation which we had been emphasizing. You are also helping us to move away from being a mere producer of raw materials by adding value to our natural resources."
Alhaji Dangote who led the team from his company, the Manufacturers Association of Nigeria, MAN, and Nigeria's leading banks had earlier told the President that they were at the Presidential Villa to thank him for his administration's policies which have greatly encouraged further investments in Nigeria.
Alhaji Dangote was accompanied by Chief Executives of participating banks including First Bank of Nigeria, UBA, Stanbic-IBTC, Zenith Bank, Access Bank, Ecobank, Fidelity Bank, Guaranty Trust Bank and Rand Merchant Bank.
Speaking with State House correspondents after the meeting, Alhaji Dangote reiterated that Nigeria's current fuel importation would end by 2016 when the proposed Dangote Petrochemical project come on stream
Alhaji Dangote said the project would create about 85,000 jobs for Nigerians at the initial stage and 8,000 engineers.
Others on his delegation included Chief Kola Jamodu, Mr. Femi Otedola, Mr. Jim Ovia and management executives of the Dangote Group.
Jobs prospect thrills Labour
Meanwhile, African region of Industril Global Union, representing 50 million workers in Nigeria and other part of the globe has commended the Dangote Group for the $9 billion loan agreement to set up an oil refinery and petrochemical complex in Nigeria.
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Nigeria’s 2012 petroleum exports valued at N15.1 trillion .
Monday, 12 August 2013 21:21 By Roseline Okere Business Services - Business News
.THE Organisation of Petroleum Exporting Countries (OPEC) has put the value of Nigeria’s petroleum exports in 2012 at $94.64 billion (N15.1 trillion).
OPEC in its Yearly Statistical Bulletin for 2012 released at the weekend put the country’s value of export at $142.52 billion and value of import at $35.71 billion.
According to OPEC: “Nigeria’s natural gas exports increased from 25,941 million standard cubic feet in 2011 to 28,266 million standard cubic in 2012, representing nine per cent increase from the previous year.
It disclosed that Nigeria’s natural gas gross production increased from 84.004 million standard cubic feet (mscf) in the previous year to 84.845 mscf in the year under review.
The country marketed gas production was put at 42.571 mscf; flared 13.182 mscf; re-injected 20.520 mscf and had shrinkage of 8.573 mscf in 2012.
The report said that the country produced 1.954 million barrels per day of crude oil in 2012, representing a decrease of one per cent from the 1.974 mpd it recorded in the previous year.
Also, in its August monthly report released at the weekend, Africa’s oil production is anticipated to increase by 80 tbpd in 2013 to 2.39 mbpd, unchanged from the previous month.
It added that despite the steady state, there were minor upward and downward revisions that offset each other.” In Africa, oil production from South Sudan and Sudan and Ghana is seen to experience yearly growth while supply from other countries is seen to either remain flat or decline”.
The report added: “Total OPEC crude oil production averaged 30.31 mbpd in July, was down by 0.10 mbpd from the previous month. Crude oil output from Libya and Iraq fell, while production increased from Saudi Arabia.
According to secondary sources, OPEC crude oil production, not including Iraq, stood at 27.34 mbpd in July, a drop of 0.05 mbpd over the previous month.
“Preliminary figures indicate that global oil supply increased by 0.08 mbpd in July to average 89.95 mbpd. Non-OPEC supply saw growth of 0.17 mbpd, while OPEC crude production decreased by 0.10 mbpd. The share of OPEC crude oil in global production remained steady at 33.7 per cent.
“The demand for OPEC crude in 2013 is forecast to average 29.9 mbpd, almost unchanged from the previous report and 0.4 mbpd lower than in the year before. In 2014, demand for OPEC crude has experienced a slight change since the previous report to stand at 29.7 mbpd. This represents a decline of 0.3 mbpd compared to the year before.
Meanwhile, the International Energy Agency (IEA), trimmed its outlook for oil demand over the next 18 months and highlighted threats to the dominance of OPEC.
The IEA said that new data on the difficulty the global economy is having in picking up speed meant that demand for oil would grow by slightly less than it had foreseen in July.
The agency said that it was trimming its forecast for growth of global oil demand this year by 30,000 barrels per day to 895,000 barrels per day because the International Monetary Fund had lowered its forecast for growth of the global economy from 3.3 percent to 3.1 percent.
The IEA also reported that output by Iraq fell below three million bpd for the first time for five months and exports were expected to plunge by about 500,000 bpd from September owing to work on infrastructure at southern ports.
It also spotlighted violence, unrest or tension in Algeria, Nigeria, Egypt and Syria.
The IEA said. “Many commentators are questioning its implications for the future of OPEC. It would have to cut its supplies under pressure from shale oil “unless falling prices curb shale oil production first.
“But at the moment, Opec’s main problem is “in bringing production to market”. Opec’s production last month “was down 1.1m bpd on the year” mainly owing to “domestic developments in some member countries”
“In an effort to reduce oil theft and pipeline damage that has led to an estimated annual loss of 60 kbpd and caused massive environmental problems, Nigeria’s largest producer Shell plans to invest $1.5 billion on a new pipeline.
“Shell was forced to close the Nembe Creek pipeline for repairs after discovering more than 50 break points along the near 100 km trunkline. In 2010, Shell spent $1.1 billion to replace the Nembe Creek pipeline due to damage. The new pipeline, called the TransNiger Pipeline Loop?line, should help reduce oil spills in the Niger Delta because it will circumvent the Ogoniland region of Nigeria, where a large volume of bunkering and pipeline damage takes place”, it added.
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Nigeria Not Responsible for U.S.$700 Million Revenue Loss, Shell Admits
By Juliet Alohan, 8 August 2013 Related Topics
Nigeria
Oil giant Shell has admitted that impact of operating environment in Nigeria was not responsible for the company's $700 million revenue loss in second quarter (Q2) 2013.
The clarification which was made yesterday by a spokesperson of Shell Nigeria, Precious Okolobo, in an email statement to LEADERSHIP, informed that bulk of the loss resulted from impact of weakening Australian dollars on deferred tax liability. According to Okolobo, only $250 million of the total $700 million loss was due to operational challenges in Nigeria including crude oil theft and blockage of Nigeria NLG.
He said: "We wish to correct some wrongful interpretation of aspects of Shell Group earnings in Q2 earnings as announced on August 1, by our CEO, Peter Voser.
"It was disclosed that Q2 Current Cost of Supplies (CCS) earnings excluding identified items were reduced by around $700 million. Of the amount, $250 million was due to operational challenges in Nigeria including crude oil theft and blockade of Nigeria LNG."
The rest of the figure, $450 million, he said, was caused by the impact of the weakening Australian dollar on a deferred tax liability.
Okolobo added that "at no time did Peter Voser refer to Nigerian production outages costing it $700 million in the second quarter, as some media organisations have wrongly reported."
This is coming after the Nigerian National Petroleum Corporation (NNPC) challenged Shell Group over claims that it lost $700 million in Q2 to operating environment in Nigeria.
"With regard to claims by Shell that it lost $700Million by the second quarter of 2013 to crude oil theft and other disruptions in Nigeria, NNPC posits that the loss claims are not localised to Nigeria as reported," acting spokesperson of the NNPC, Tumini Green said in a statement Tuesday.
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N65.1bn subsidy debt: Mobil, Total, others threaten to stop fuel importon July 15, 2013
/ in News 12:04 am
By Clara Nwachukwu
LAGOS—Major Oil Marketers Association of Nigeria, MOMAN, has threatened to stop the importation of Premium Motor Spirit, PMS or petrol, if the Federal Government did not pay its outstanding N65.1billion subsidy claims.
The outstanding sum is the combination of the following:
*import claims from 2011 – N49.5billion
*bank interest payments – N13.10billion
*foreign exchange claims – N2.5billion
The majors, comprising Mobil, Total, MRS, Forte Oil and Conoil, however said that only about N9.4billion of the total sum had been paid after much pressure on government, still leaving a huge outstanding of N55.7billion unpaid.
The marketers noted that some of these claims have remained outstanding since 2011, with huge implications on their operations.
The Executive Secretary, MOMAN, Mr. Obafemi Olawore, told journalists in Lagos weekend that “The implication of the non-payment of our claims is that it is affecting our bottom line, and this will lead to a reduction in petrol importation, and eventually the downsizing of workers.”
He noted that one of the six-member group has not been paid since 2011, while the burden of the foreign exchange losses of N2.5billion are being borne by three of the marketers and still counting as long as the claims remain unpaid.
Olawore argued that the majors were not trying to blackmail the government as suspected, noting that the banks were no longer willing to extend credit facilities for members to continue to import fuel due to the high interest rate of over N13.10billion that have accrued since 2011.
“If the banks don’t give us the facility, and government is not paying us, what else can we do? Of course importation will stop because our ability to continue with the process has been weakened. Also, interest charges have eaten deep into our meager reserves, and there may be no other option than to start staff rationalisation,” he said.
Products
importation
Petrol and kerosene are the two refined petroleum products approved for subsidy by the federal government, to enable marketers sell the products at regulated pump prices.
However, because of the politics involved in kerosene importation, all other marketers abandoned the process, leaving only the Nigerian National Petroleum Corporation, NNPC with the burden of importing, and selling at N50/litre prescribed by government.
Other marketers sell kerosene at between N100 and N170/litre depending on location and outlet.
Currently, the majors are the second largest importers of petrol second to the, NNPC, while the independent marketers merely complement imports with whatever quantity they could bring in.
However, in view of the clamp down by banks, many of the independents have been run-over, while some are placed under receivership.
The developments resulted in significant drop in the level of imports done by the independents, while the majors, using their international affiliations have been able to remain afloat.
How the claims accumulated
In the wake of nationwide crisis on account of the pump price increase of petrol and subsequent probing of the subsidy regime, government froze further payments of subsidy claims until the conclusion of the probes.
“At the peak of the crisis, government promised to pay us as soon as the probes were over. But it took a long time before they started to pay, and this led to the accumulation,” Olawore said.
Furthermore, to check galloping interest charges, government and the marketers agreed on a 45-day payment scahedule from when the claims were compiled to the point of payment.
Olawore disclosed: “But they (government) are not following the 45-day agreement. From January 2011, when the subsidy crisis started up till early June, nothing was paid to us, until we started making noise and they started paying from mid-June.”
In all of these, he noted that the banks are the happiest because of the interests accruable, such that one of the majors paid as much as N4.04billion as interest in 2012, and will pay another N605.8million in 2013.
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FG Concessions Oil And Gas Free Zone For $2.7b
By: NSE ANTHONY-UKO, Chika Izuora on June 20, 2013
The federal government has ratified President Goodluck Jonathan’s anticipatory approval for the concession and development of Phase 4B facilities at Onne Oil and Gas Free Zone, Onne Port Complex for the sum of $2,797,129,243.26.
Minister of transport, Mr. Idris Umar who brought a memo to this effect before the Federal Executive Council (FEC) noted that the concept of the development of the facilities “was to decongest the Lagos and Port Harcourt ports while entrenching PPP in the establishment and upgrading of public sector facilities.
“The project is expected to generate 4,000 job opportunities for both professionals during its execution and about 20,000 direct and indirect job opportunities when it is in full operation”, he added.
The minister, while briefing journalists after the FEC meeting presided over by the president said, “After deliberations, Council ratified the president’s anticipatory approval for the award of contract for the concession and development of Phase 4B port facilities at Onne Oil and Gas Free Zone, Onne Port Complex, for the sum of $2,797,129,243.26 only”
This, he noted, was “exclusive of all taxes, with a completion period of six years and a concession period of 25 years to be solely pre-funded by the contractor, Messrs Deep Offshore Services Nigeria Limited, and the cost to be amortised from the service boat and other port charges in all the ports”.
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Nigeria: Court Orders EFCC to Evacuate Stolen Crude Oil
By Tobi Soniyi, 16 May 2013 Nigeria
Congo-Brazzaville: Call for Oil Revenues...
Justice Elvis Chukwu of the Federal High Court in Abuja has granted the request of the Economic and Financial Crimes Commission, (EFCC) to evacuate for safe keeping the petroleum products recovered from 14 suspected oil thieves facing prosecution for oil bunkering.
The EFCC had in an ex-parte motion filed pursuant to section 26 of the EFCC Act, 2004, asked the court for an order granting it leave to evacuate the petroleum products conveyed by the suspects in trucks and vehicles as specified in the schedule attached to the affidavit for safe keeping.
The commission stated that the seized petroleum products were currently at the premises of Shittu Alao Barracks of the 177 Battalion, Guards Brigade, Nigerian Army, Keffi, Nasarawa State.
EFCC's counsel, Elizabeth Ayodele, had prayed the court for an order directing the Managing Director of PPMC, the Department of Petroleum Resources (DPR) or the relevant arm of Nigerian National Petroleum Corporation (NNPC) to evacuate and keep in safe custody the crude oil recovered from the trucks.
Justice Chukwu granted the motion as prayed and adjourned the case to May 27, for continuation of hearing.
The suspects - Joseph Amaechi, Israel Friday, Ubadia Francis, Abayomi Adebisi, Abdullahi Idris, Samuel Job, Onah Peter Ode, Sabo Tasha Hassan, Abdullahi Moh'd, Abubakar Abdulkadir, Ehiogu Paul, Ibrahim Saidu, Garba Mohammed and Bartholomew Onyema were arrested at Toto Military checkpoint, in the state with 14 trailer load of suspected crude oil after a failed attempt to bribe their way through the checkpoint.
In his testimony before the court, Lieutenant Mohammed Bashir Sani, who led the guard patrol that arrested the suspects, said the arrest took place along the Lokoja - Abuja road based on an intelligence report at the disposal of the Nigerian Army.
Sani told the court that the accused persons ran into the Army ambush and were immediately arrested by soldiers having been hinted on the alleged crime.
According to him, the accused persons drove 14 tankers with crude oil and on arrival at the check point, allegedly offered N20,000 bribe per tanker to soldiers on duty in order to go unhindered.
Led in evidence by Mrs. R. A. Ayodele, the witness said the accused persons were arrested, snapped with their tankers and moved to military locations for interrogation.
He informed the court that the Army authorities later invited the EFCC to further interrogate the suspects.
The witness also claimed that the apprehended 14 tankers and the bribe money were handed over to the EFCC.
In the four-count criminal charges preferred against the suspects by federal government, they were accused of conspiracy and felony involving wilful and malicious breaking of oil pipeline meant for the transportation of crude oil contrary to and punishable under Section 3(6) of the Miscellaneous Offences Act Cop M17, Laws of Nigeria 2004.
The offence was alleged to have been committed at Kilometre 82, Piri Village along Abaji-Lokoja road in March this year.
The charges signed by Salisu Majidadi of the legal unit of EFCC also accused them of dealing in crude oil sales without lawful authority or license, an offence punishable under the miscellaneous offence Act 2004.
All the accused persons however pleaded not guilty to the charges.
Their lead counsel, Barrister Joseph Oluwarotimi Ojo applied for their bail on the ground that the offence was ordinarily bailable and that the court has disretional power to admit them on bail on liberal terms.
Justice Chukwu adjourned ruling on the bail application till May 27 while the trial of the accused persons continues today.
Meanwhile, the accused persons have been sent to Kuje Prison till the date of the ruling on their bail and from where they will be coming for their trial.
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India becomes single-largest importer of Nigerian crude .
Monday, 06 May 2013 20:28 By Sulaimon Salau, with agency report Business Services - Business News
A SHARP twist to the new shale oil development has eventually begun to impact on Nigeria’s export market, as India has surpassed the United States (U.S.) to become the single-largest importer of crude from Nigeria.
Analysis from an international energy agency, Platts indicated that India is now accounting for about 17 per cent of the crude imports from Nigeria.
Global Editorial Director of Oil News, Richard Swann, said that the emergence of India as the largest consumer of Nigerian crude occurred rapidly over the past year.
“India’s demand for crude oil is constantly rising and it makes economic sense to ship it from Africa due to the geographical proximity,” Swann said.
The U.S. has become less depended on imported crude because of the development of shale gas and shale liquid in the country.
The surprising growth of US domestic light shale oil production has resulted in a sharp 63 per cent drop in US dependence on imports of light sweet Nigerian crude in just five years, from a peak of 1.084 million barrels per day (bpd) in 2007 to just 405,000 bpd last year, according to data from the US Energy Information Administration. The 2012 volume was the lowest since 1985 when crude imports from Nigeria averaged 280,000 bpd.
On the other hand, India is expected to import at least 13 cargoes, or 17 per cent of the 75 scheduled for export, from Nigeria by end May. In March and April, India imported six and seven cargoes, respectively. On an average, one cargo has around a million barrels of crude oil.
Indian state-run companies such as Indian Oil Corp. Ltd, Hindustan Petroleum Corp. Ltd (HPCL), Bharat Petroleum Corp. Ltd and Mangalore Refinery and Petrochemicals Ltd figure among significant Indian buyers of crude from Nigeria.
The refineries of these companies require sweet crude like that produced by Nigeria for their product slate.
On the other hand, private companies such as Reliance Industries Ltd and Essar Oil Ltd have stayed away from the Nigerian crude market since they can make do with heavier and cheaper crude due to the high complexity of their refineries. The Executive Director of International Trade and Supplies at HPCL, B.K. Namdeo, said: “Nigeria is one of the largest producers of low sulphur crude and India needs this kind of crude. The Brent-Dubai differential has become very less in the last five to six months and there are environmental concerns over sulphur dioxide emission, which makes Nigerian light crude attractive.”
The quality and stability of Nigeria’s crude production makes it one of the most expensive crude in the world, enjoying a premium of around $3.6 per barrel over Brent. The Brent price of crude was $104.19 per barrel last week. It has fallen by more than 6 per cent in the past year, but the price of Nigerian crude has sustained itself, largely due to the increased demand from India.
The Executive Director and Head of the Energy and Natural Resources Sector at advisory firm KPMG (India), Arvind Mahajan, said: “India sources most of its crude from the Middle East and now it may be looking to diversify its sourcing portfolio,” said “India and Nigeria have always had good relations and there may have been many government-to-government discussions on this issue.”
Shale gas or natural gas trapped in sedimentary rocks, known as shale formations, is being increasingly tapped by the US, Canada and China as an alternative to conventional oil and gas.
Meanwhile, India is also planning to unveil a shale gas exploration policy in a month, to exploit unconventional hydrocarbon resource to meet its growing energy needs.
The Indian government had said plans to launch its first auction of shale gas block by the end of 2013 on terms that are likely to be remarkably different from those offered in bid rounds for oil and gas blocks.
However, Nigeria’s exports of Bonny Light, Qua Iboe and Forcados crude might likely fall in June compared with May, according to provisional loading programmes.
Nigeria will export 10 cargoes of Qua Iboe in June, one less than in May, and amounting to 316,667 barrels of oil per day.
There will be six cargoes of Forcados, totaling 172,400 barrels per day in June, down from nine cargoes equaling 231,000 barrels a day in May.
Two traders said there will be no fresh exports of Bonny Light in June, and the only exports of the crude in the month will be delayed cargoes from the May programme.
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NPDC daily crude production now 138,000 barrels
April 30, 2013 by Dayo Oketola
Minister of Petroleum Resources, Mrs. Diezani Alison-Madueke
The Nigerian Petroleum Development Company Limited, a wholly owned subsidiary of the Nigerian National Petroleum Corporation, has increased its daily oil production to 138,000 barrels from 60,000bpd.
This was contained in a rejoinder signed by NPDC management in response to a story published in a national newspaper (not The PUNCH) on Friday alleging that the Minister of Petroleum Resources, Mrs. Diezani Alison-Madueke, was involved in a N59tn oil deal.
“NPDC production has grown from 60,000bpd to 138,000bpd. Currently, NPDC is the major gas supplier to the domestic market in the western Niger Delta with over 450 mmscf/day, which will further increase to over 550 mmscf/d by the end of 2013,” the company said.
To expand its opportunities in the upstream oil and gas sector, NPDC said it had adopted funding mechanisms to secure production capacity of 250,000 barrels per day by 2015.
“This strategy is essential if the national oil company is to be a major player in the upstream sector in Nigeria and provide national energy security for the nation. A strong NOC is sine qua non for national security as practised by all other oil producing countries,” it said.
The support of the Federal Government in ensuring NPDC’s expanded operations by seeking additional asset base and funding outside the normal government funded Joint Venture cash call is, therefore, an imperative, according to the company.
“It is interesting that the laudable actions of the Minister of Petroleum Resources, who has consistently fought to support and grow the National Oil Company, NPDC, against competing interests is being parodied and vilified by certain groups,” it said.
Five oil communities in Delta State led by Chief Emami Ayiri were said to have made allegations against Alison-Madueke.
Specifically, the minister was alleged to have deliberately excluded indigenous rights to pre-emption and/or first refusal on four oil blocks: OMLs 26, 30, 34 and 42.
She was also alleged to have illegally assigned 55 per cent of the Federal Government’s interest to Atlantic Energy Drilling Concepts without any recourse to due process in the transactions.
The minister was also alleged to have had pecuniary interest in Atlantic Energy Drilling Concepts, hence her approval of the deal that would make Nigeria lose four trillion cubic feet of gas asset worth $15.72tn.
Meanwhile, the minister has said gas supply to the country’s domestic market has been growing at 20 per cent per annul and is currently at a peak of 1.5 million cubic feet of gas per day.
A statement from the NNPC quoted her as describing the development as a major boost to the Federal Government’s power reforms.
Alison-Madueke, who spoke at the opening of the Nigerian Economic Summit Group Roundtable discussion recently held in Abuja, said, “It will interest you to know that gas supply has grown at a most unprecedented rate of about 20 per cent per annum, effectively reaching a new peak of about 1500mmcf/d from less than 500mmcf/d a few years ago.”
Alison-Maduke was represented by the Group Executive Director, Gas and Power, NNPC, Dr. David Ige.
She said over the last three years, the gas sector had experienced aggressive reforms culminating in the major gas addition to the domestic market.
According to the minister, the current demand by the National Integrated Power Project is put at about 260mmcf/d in the western area and it is expected to grow to about 340mmcf/d by the year end.
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Delta indigenes besiege N’Assembly over alleged minister’s N58.9tr oil blocks fraud .
Thursday, 25 April 2013 00:00 From Terhemba Daka, Abuja News - National
.INCENSED by what they considered a monumental fraud involving N58.9 trillion, representatives of five oil-producing communities of Delta State Thursday besieged the major gate leading to the National Assembly complex in Abuja.
The Delta State indigenes, who were protesting against alleged exclusion of the host communities from the sale of the Oil Mining Leases (OML), submitted a petition to the lawmakers. They alleged that the bidding for the OML was shrouded in secrecy.
“By this deal, 60 per cent of NPDC’s 55 per cent stake of these assets is about five billion barrels, which when calculated with the 2013 crude oil benchmark, comes to $380 billion or N58.9 trillion. This figure is exclusive of the 4 Trillion Cubic Feet (4 TCF) of gas asset in the blocks valued at $15.72 trillion “, they said.
For six hours, the over 300 youths, including women who stormed Abuja in chartered buses late Wednesday, mounted a blockade yesterday and prevented vehicular movement to the National Assembly complex.
The development, which left the police and other security operatives in utter helplessness, also compelled parliamentary workers as well as visitors to trek the distance from the National arcade located in the Three Arms Zone to the National Assembly complex.
But a quick intervention by the leadership of the National Assembly prevented the protest from degenerating into a crisis as the Senate President, David Mark, as well as the Speaker, Aminu Waziri Tambuwal, sued for calm and assured that the relevant committees of the parliament would liaise with other stakeholders within 30 days during which a solution to their grievances would be arrived at.
The Senate Deputy Majority Leader, Abdul Ningi who received the petition on behalf of the Senate President, specifically assured that the two chambers of the parliament would urgently intervene in the matter for the benefit of the host communities.
“The issue of host communities is critical to the parliament and the two chambers will within 30 days look at the petition and ensure that justice is done on the matter,” he said.
House Chief Whip, Isiaka Bawa, who received a copy of the petition along with Deputy Leader of the House, Leo Ogor on behalf of the Speaker, also assured that both chambers of the National Assembly would address the issues in line with legislative procedures.
The leader of the group made up of Itsekiri, Ijaw, Urhobo, Isoko and Ndokwa ethnic nationalities, Chief Emami Ayirimi, alleged that two days before President Goodluck Jonathan dissolved the Federal Executive Council (FEC) in 2011 so as to reconstitute it for his new mandate, officials of the Nigerian Petroleum Development Company (NPDC), of which the Petroleum Minister is Chairman, secretly transferred production rights in four large oil blocks, OMLs 26, 30, 34 and 42, to a company which neither tendered nor bid for the blocks.
He urged the parliament to specifically put on hold the handover of OMLS 4, 26, 30, 34, 38, 41 and 42 to the company and another one pending the determination of the issues raised in the petition.
Ayirimi also urged the House to order a cancellation of all the awards on OML 4, 26, 30, 34, 38, 41, and 42 and right of first refusal to be given to the qualified indigenes of the local communities to buy into them.
“Why was the entire process organised in such a calculated manner as to completely exclude the interest of the host communities by ensuring that no indigenous company from the host communities benefited from the award?” he queried.
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13 Fuel-laden Ships To Discharge At Lagos Ports
By: Agency Report on April 25, 2013 - 1:42pm
No fewer than 13 ships are waiting to discharge petroleum products at the various oil terminals within the Lagos Ports, the Nigerian Ports Authority (NPA) has said.
This was contained in NPA’s daily publication, the Shipping Position, made available to the News Agency of Nigeria (NAN) on Thursday in Lagos.
The publication reported that five of the 13 ships would discharge petrol, another five would discharge diesel, two kerosene and one bulk gas.
According to the publication, four other ships will discharge bulk wheat, general cargo and bulk malt.
It said that 75 ships, carrying different cargoes, would also sail into the ports between April 25 and May 19.
The publication reported that 15 of the ships would arrive with petroleum products, while 10 would sail in with new and used vehicles.
It said that 21 other ships would arrive with containers and others with general cargoes, bulk fertiliser, bulk wheat, fresh fish, bulk salt crude palm oil and bulk cement.
NAN reports that 17 ships are currently discharging containers laden with fresh fish, bulk malt gypsum, sugar and petroleum products. (NAN)
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Controversy Trails Revelation Of Oil Blocks Ownership .
Friday, 08 March 2013 21:56 By Samson Ezea and Sunny Neme News - National
.FOLLOWING the shocking revelation on Wednesday by the Chairman Senate Committee on Business and Rules and Senator representing Akwa Ibom North-west in the upper chamber, Mr. Ita Enang during the Petroleum Industry Bill (PIB) debate, that about 83 per cent of the entire oil wells in the Niger Delta are owned by Northerners, former Vice Chancellor of Ahmadu Bello University (ABU), Zaria and member of Northern Elders Forum (NEF) Prof Ango Abdullahi has demanded for the comprehensive and authentic list of ownership of oil wells so that Nigerians will know the truth and the way forward.
Enang had stated that the 10 per cent provision to oil communities was fair and in order, insisting that the amount was nothing compared to what accrues to the owners of the oil blocks, most of who are northerners.
Speaking with The Guardian Friday on the issue, Abdullahi said Enang’s allegation on the floor of the Senate was a mere political debate that needs further clarification and confirmation to ascertain the correct information.
He said: “I have not seen the details of the list of owners and there isn’t a comprehensive list from the government on the ownership.
“I do not care who owns what. My concern is that there is need for the government and its relevant agencies to disclose the full list of owners of the oil wells to Nigerians.
“It is an information Nigerians are willing and will be ready to have so that they know who controls and manages their collective wealth. Such disclosure will give the true picture instead of mere debate and allegation,” he said.
On the issue of 10 per cent allocation to host communities in the PIB (bill), Abdullahi said that it is not necessary. Rather, the host communities should be given seven per cent from the 13 per cent that goes to the states in the Niger Delta region, while the states retain six per cent.
He stressed that there is need for accountability and transparency in the management of the funds that accrued to the region through different agencies since 1999 which amount to N11trillion without something to show for it.
“Unless discipline and transparency is instilled in the management of funds accrued to the region, no amount of money given to the region will change things there as long as wastage and looting prevail,” Abdullahi said.
But on his part, President-General Trade Union Congress (TUC) Mr. Peter Esele, said the debate on the ownership of the oil wells, whether by people from North or South, is unnecessary at this point, but how they used the proceeds from it to empower the people and develop the country is what should bother Nigerians.
He said: “Do you prefer foreigners to own them? I prefer Nigerians to own them instead of foreigners. The questions should be how have the owners used the proceeds from it to develop the country and empower the people for better days ahead?
“Award of oil block license and renewal, especially during the military regime, was done in secrecy which has not helped matters as regards to accountability and transparency in governance.”
Esele insisted that there is urgent need for the passage of the 10 per cent allocation to host communities in the PIB bill that is before the National Assembly.
Reacting to the development, President of Ijaw Monitoring Group, Comrade Joseph Evah congratulated the Northerners for hijacking their oil, stressing that the people of the South-South region were the architects of their problems.
His words: “Niger Delta region produced the highest number of political prostitutes in the country because they do not know what they want and how to go about. The Northerners were able to hijack the oil wells because they are more organised than our people. We have no political or economic strategists in the region that can show the way forward.”
He said that no percentage of the oil money should be accrue to the states. Rather, all of them should be directly used in developing the oil communities which is in accordance with international best practices.
In a similar development, a human rights activist, Ms. Anko Briggs has called for total stoppage of oil exploration in the Niger Delta following the raging controversy over the allocation of over 80 per cent of oil blocks to highly placed Nigerians from a section of the country.
According to her, “My reaction to the development is one of anger and total disbelief that a handful of people can rob a whole region of their resources? We need to know what qualified them, who allocated them the oil blocks. This is criminal and the President must follow necessary procedure to withdraw it from them.”
She further called on the people of Niger Delta region to stand up against the injustice. “I call on Niger Deltans to demand for a total resource ownership, not just control. I will want to encourage the people of Imo, Abia and Ondo states to join in this battle for the soul of the oil-rich region.”
On the PIB bill that has entered its second reading after so much dust was raised, she said: “We are no longer interested in it. It is about 10 per cent and a few individuals have over 80 per cent.
“If going back to the trenches will solve this matter once and for all we will go there, because I am using this medium to call on the people of Niger Delta to stop all oil exploration in the region until this injustice is address.”
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Northerners own 80% of oil blocks
Revealed: Northerners own 80% of oil blocks
Posted by: Onyedi Ojiabor and Sanni Onogu, Abuja on March 7, 2013
Supporters of the Petroleum Industry Bill (PIB) pushed their case further yesterday at the Senate, with startling facts on the sector.
Senator Ita Enang (Akwa Ibom North East) described the opposition to the 10 per cent host community fund by mostly northern senators as “misplaced”.
Enang, who is also the Chairman, Senate Committee on Rules and Business, said that those opposed to the fund should know that over 83 per cent of oil blocks are owned by northerners.
But he did not give the number of oil blocks Nigeria has.
Senate President David Mark, who seemed to have been shocked by what Enang said, said the Akwa Ibom lawmaker should not be distracted (some senators were grumbling) because he was making an important point.
Mark asked Enang whether he could substantiate his claim.
Enang promptly pulled out a document from his folder and reeled out oil blocs and their owners.
He said he did not intend to divide the country but to guide those who wanted to contribute to the debate to be truly informed.
He listed northerners who own oil blocks to include Alhaji Mai Deribe, Borno State and owner of Cavendish Petroleum, which operates OML 110 with an average of about N4billion monthly.
He also listed Seplat/Platform Petroleum, operators of the ASUOKPU/UMUTU Marginal Field with Mallam (Prince) Sanusi Lamido, Kano , as a major shareholder and director.
South Atlantic Petroleum Limited (SAPETRO) established by General T. Y. Danjuma, Taraba State , who is also chairman of Eni Nigeria Limited.
SAPETRO partnered with Total Upstream Nigeria Limited (TUPNI) and Brasoil Oil Services Company Nigeria Limited to become operators of the OPL 246.
AMNI International Petroleum and Development Company is owned by Alhaji (Colonel) Sani Bello of Kontangora , Niger State.
“They are operators of OML 112 and OML 117,” he said.
He said that a former Petroleum Minister and former OPEC Chairman, Rilwanu Lukman, another northerner manages AMNI oil blocks “with very key interest in the NNPC/Vitol trading deal.”
He said that Oriental Energy Resources Limited, a company owned by Alhaji Indimi, runs three oil blocks – OML 115, the Oldwok field and the Ebok field.
He said that Alhaji Aminu Dantata’s Express Petroleum and Gas Limited, operates OML 108.
Enang said that OML 113 allocated to Yinka Folawiyo Petroleum Limited is owned by Alhaji W.I. Folawiyo. Alhaji Saleh Mohammed Gambo, North East Petroleum Limited, is the holder of the OPL 215 Licence.
North East Petroleum was awarded blocs OPL 276 and OPL 283 and closing thereupon a Joint Venture Agreement with Centrica Resources Nigeria Limited and CCC Oil and Gas.
He said that INTEL is owned by former Vice President Atiku, the late Gen. Shehu Musa Yar’Adua and Ado Bayero. It has substantial stakes in Nigeria ’s oil exploration industry both in Nigeria and Sao Tome and Principe .
He said that Mike Adenuga’s Conoil is the oldest indigenous oil exploration company with six blocks. OPL 291 was awarded to Starcrest Energy Nigeria Limited, owned by Emeka Offor, which was sold to Addax Petroleum.
Enang urged the Senate to cause the immediate revocation of all oil blocks licences and their redistribution, in accordance with the Federal Character Principle.
He said: “My submission is that when you look at the distribution of those who own oil blocks and the amount of money that comes from the different oil blocks to the Federation Account and you see the owners of these oil blocks, you will agree with me that there is inequity in the distribution of oil blocks.
“The oil is produced in the Niger Delta yet it is the people of the Northeast and the Northwest and a little of the Northcentral, almost nothing of the Southwest and the Southeast, that are the persons owning and controlling these oil blocks.
“Almost nothing for the Southsouth, Niger Delta oil producing areas.
“They are quarreling with the area that takes just 13 per cent when you are producing the entire 100 per cent, you give some to the Federation Account and they give only 13 per cent of what you give and, of course, it is whatever you declared that you have produced. It is actually produced by you.
“I did not want to introduce something that is divisive.
“It is not intended to divide the country, it is intended to say ‘look, let us be realistic’.
“What some of the oil wells and the owners of the oil wells produce in a month and take as profit is sometimes more than what two or three states receive from the Federation Account.”
Enang noted that “when a group of people are richer than a state and then it is produced by you, then there is so much opposition that even the people who suffer the effect of the oil production should not be give host communities’ fund; and we have explained that the host communities fund is not only for the oil producing; it is for any of the communities that hosts oil infrastructure, which includes oil pipelines, refineries, gas pipelines and anything that is capable of causing danger.”
“If we had the host communities fund, the danger that we have been having in Arepo in Ogun State, the area would have benefited from the host communities fund.”
Enag said that other areas, such as Kaduna and some other states, will benefit from it.
He went on: “If you are producing and declaring only what you like and only the 10 per cent now being provided for the host communities and the 13 per cent which is after deducting everything, that cannot be in the interest of the country.
“What I am asking now is that oil blocs in the whole country should be revoked and redistributed according to Federal Character Principle.
“We are not saying that we in the Southsouth should have all or the Southeast should have all or the Southwest should have all.
“In fact, if there are 18 oil blocs or 36 oil blocks, we don’t mind that you give us at least four, Northeast four, Southeast four, Northwest four.
“At least, let there be equity, but then there should be the principle of who owns it and then you give us more.
“But at this time, we don’t even have it. The 13 per cent is what we are even suffering to sustain.”
Senator Olufemi Lanlehin (Oyo South) praised the maturity of Senators in considering the bill.
He urged the Senate to look at the “absolute and sweeping powers” granted the President in Section 191 of the bill.
The Section, he said, gives the President absolute and unqualified powers to grant petroleum licences to whoever he pleases.
Lanlehin prayed the Senate to use the opportunity of the bill to design a template that would grow the economy.
Senator Adegbenga Kaka (Ogun East) said he was supporting the bill with mixed feelings.
He noted that the trend of the debate seemed to indicate that senators were more concerned about how to share the cake and not how to bake it.
Kaka said the power granted the minister of petroleum in the bill should be reconsidered “so that we don’t give too much power to the minister.”
The lawmaker who insisted that the bill should be finetuned, said certain percentage of earnings should be set aside to fix electricity, agriculture and other infrastructure.
Senator Mohammed Goje (Gombe Central) said before the debate, he was completely against the bill.
He said the trend of the debate showed that the Senate was poised to do justice to the bill by removing offensive sections.
To him, it seems a consensus is being built around certain sections of the bill.
He noted that most contributors agreed that the power of the minister should be reduced, such that the minister will just be like any other minister.
Goje said: “We should not create a super minister.”
He said that definite provision should be made for frontier exploration, especially adequate funding.
He opposed 10 per cent host community fund.
Senator Barnabas Gemade (Benue North East) described the bill as very important and long overdue.
Gemade said an adage says: “Wherever you find oil, corruption creeps in and wherever you find diamond war emerges.”
He said the adage had been proved to be true.
Gemade said the bill contained good and bad provisions. He listed the good sections to include development of the gas sector, increase in promotion of local content and the unbundling of the Nigeria National Petroleum Corporation (NNPC).
The bad sections, he said, include the minister’s economic power.
On the host community fund, Gemade said efforts should be made to ensure that it does not degenerate to very poor management of resources as it is, according to him, in the Niger Delta Development Commission, 13 per cent derivation and others.
On the frontier exploration, he said more effort should be geared towards discovering oil in other places.
Senator Akin Odunsi ( Ogun West) described the bill as the most important legislation before the National Assembly.
Odunsi noted that the bill becomes even more important when it is recognised that the country runs a mono economy based on oil.
The lawmaker cautioned against undue sentiment in the consideration of the bill.
He agreed that the bill was not perfect but posited that it could be fine-tuned to engender development.
Senator Abdulahi Adamu (Nasarawa West) said he was giving the bill “a reserved support”.
Adamu expressed worry about the absence of transparency and accountability in the oil sector.
He said the bill appears to contradict the Constitution (as amended), especially when it is recognised that oil and gas as well as other minerals are in the Exclusive List and under the control of the Federal Government.
The lawmaker cautioned about the unbundling of the NNPC in order not to put up the corporation for outright purchase by wealthy Nigerians.
On the host community fund, Adamu said the provision would create the fourth tier of government.
To Senator Gbenga Ashafa (Lagos East), the bill will be counter productive in its present form. He demanded the definition of host community.
Ashafa said pipelines burst at times not because of vandalisation but because of the integrity of the pipes.
Senator Ayogu Eze said his support for the bill stemmed from the realization that the oil sector should be reformed.
Eze highlighted issues of details in the bill, which, he said, should be addressed at the committee and public hearing levels.
It was obvious that most northern Senators were not comfortable with what Enang said.
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Senate denies approving NNPC’s $1.5 billion loan .
Tuesday, 08 January 2013 00:00 From John-Abba Ogbodo and Collins Olayinka, Abuja News - National
.• To probe deal, corporation avoids comments
THE raging controversy over the alleged $2.5 billion loan of the Nigerian National Petroleum Corporation (NNPC) took a fresh dimension Tuesday with the Senate denying approving the deal.
The upper chamber of the National Assembly said the transaction would be investigated. Speaking on the development Tuesday in Abuja, Senate spokesman, Enyinnaya Abaribe, categorically stated that the chamber did not approve the loan for the corporation.
He said no agency of government could obtain loans without the authorisation of the legislature.
“Under the law, no government agency can borrow money without the approval of the National Assembly. We have to know if that was done first, but then the question to ask under the circumstance is, what happened to the N161 billion supplementary appropriation that was approved by the National Assembly for government to take care of the shortfall in the fuel subsidy budget, particularly to ensure steady supply of petroleum product during the yuletide?”
Also reacting, Chairman Senate Committee on Petroleum (Downstream), Magnus Abe, said there was no approval for the loan.
“As at this afternoon, there’s no record of the loan deal before us. We are still trying to confirm the loan from NNPC
. The committee read about the loan deal on the pages of newspapers like other Nigerians and we have had concerned Nigerians calling to ask whether the National Assembly approved the loan.
We have no record of such before us,” he said.
It was reported that the deal was concluded last year and that the NNPC had put up 15,000 barrels per day as collateral for the loan.
But there was no official reaction from the NNPC over its alleged borrowing of $1.5 billion to offset fuel import.
Besides, the President of the Trade Union Congress (TUC), Peter Esele, has urged the creation of an NNPC that would be run strictly as a business concern in line with the Petroleum Industry Bill (PIB) that is before the National Assembly.
The Guardian learnt in Abuja Tuesday that the need to ensure that the refusal of most fuel marketers to import fuel as a result of subsidy regime audit did not lead to fuel shortage in the country influenced the decision of the management.
It was learnt that the NNPC’s move, which was purely a ‘business decision’ was arrived at with the backing of the Minister of Petroleum Resources, Mrs. Diezani Alison-Madueke. The minister is also the Board Chairman of the NNPC.
The $1.5 billion was borrowed to offset accumulated debts for petrol already supplied by some foreign importers.
It was further learnt that the decision was taken to ensure that the country does not suffer financial embarrassment in the international oil market.
A source at the NNPC said the decision was purely on business merit and that it did not require the approval of the National Assembly.
It was noted that since the loan was not obtained in the name of the Federal Government, there was no need to seek the approval of the National Assembly .
Explaining further, the source said the debt would be in NNPC’s books and not the Federal Government’s.
Speaking on the furore the loan was generating in Abuja , Esele stated that the PIB must create an NNPC that was insulated from government’s frequent interference.
He added: “We must ask ourselves what kind of NNPC we really want. We must strive to create an NNPC that would be run as a business concern. As it is today, there is too much interference from government be it executive or legislative. The way the NNPC is run today is not in our collective interest.”
The TUC president also flayed the borrowing of $1.5 billion to fund fuel importation saying, “this bogus amount is more than enough money to build us a new refinery. I just wonder why we run our country like this.”
Industry practitioners have also expressed worry about the return of unbridled fuel import regime.
An industry operator who spoke with The Guardian on condition of anonymity said: “I fear for this industry because politicians are back to their game again. They have started looking for slush money, which the industry has always brought. This is beginning to play out once again.”
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FG drops planned refinery projects •Jonathan must tackle fuel subsidy corruption–Labour
December 15, 2012 by Niyi Odebode and Fidelis Soriwei, Abuja
President Goodluck Jonathan
Eleven months after promising to build three new refineries for the country, the Federal Government may have dumped the plan.
Saturday PUNCH investigations showed that the FG may have dropped the idea because of the unresolved issue of deregulation of the downstream sector of the petroleum industry.
This development came to the fore as organised labour expressed surprise at President Goodluck Jonathan’s N161bn supplementary budget on fuel subsidy for 2012.
The labour body advised the President to tackle corruption in the oil sector.
The President had in a letter to the National Assembly on Tuesday, said the N888bn budgeted for fuel subsidy this year would not be enough.
But as Jonathan is seeking an additional N161bn, the FG has yet to begin moves to build the three refineries it promised during the fuel subsidy protests last January.
The Nigerian National Petroleum Corporation had in 2010 unfolded plans to build three new refineries.
The refineries are to be sited in Kogi, Lagos and Bayelsa states.
The NNPC Group Executive Director, Engineering and Technology, Mr. Billy Agha, who stood in then for the Group Managing Director in Yenagoa, Bayelsa State, had said 7,000 job opportunities would be created by the Greenfield Refinery that would be built in the state by the corporation in partnership with the China State Construction Engineering Corporation.
Again in 2012, at the height of the fuel subsidy protests, the Federal Government said it would build three refineries.
The Minister of Works, Mr. Mike Onolememen, who spoke to douse the tension associated with the protests, had said, “I want Nigerians to know that when these new refineries are completed, we will be a net exporter of petroleum products and prices will begin to come down, just as we are witnessing in the telecommunications sector with the GSM regime.
“That is my message to Nigerians. Let us support the government. Let us join hands with the government because it cannot and will not take any decision with the aim of punishing fellow Nigerians. It is impossible. So, Nigerians should have this at the back of their minds.
“The one in Lagos is with the capacity of 200,000 barrels per day, while the ones in Kogi and Bayelsa have the capacity to produce 100,000 barrels per day.”
Investigations at the NNPC showed that 11 months after the government promised to build the three refineries, not much has been done to that effect.
A top official of the corporation told one of our correspondents that the three refineries were supposed to be part of the government’s effort to stop fuel importation.
He said, “The three refineries are to be built by the government in partnership with the private sector. They do not include the six that are solely private sector driven.
“But from all indications, the government has developed cold feet and the six by the private sector seem to be still-birth. There are various stakeholders who prefer fuel importation. These are the people that will not allow the plan to build refineries to succeed.”
President Goodluck Jonathan had said that private investors were not interested in building refineries in the country because of the fuel subsidy regime.
He had said, “Why is it that people are not building refineries in Nigeria despite the fact that it is big business? It is because of the policy of subsidy, and that is why we want to get out of it. Who will build refineries and end importation of petroleum products? Subsidy must go.”
The President had spoken in Abuja when he received the report of the graduating participants of the Senior Executive Course 34, 2012 of the National Institute of Policy and Strategic Studies.
Efforts to get NNPC’s comment on the status of the three refineries did not succeed.
Attempts to speak with the acting General Manager, Public Affairs at NNPC, Mr. Fidel Pepple, proved abortive as calls to his cell-phone did not go through. It was learnt that he was out of the country.
Similarly, attempts to speak with the General Manager, Media, Dr. Ibrahim Umar, were unsuccessful. He neither picked calls to his cell-phone nor replied a text on the status of the refineries.
Commenting on the failure of the government to build the three refineries, the President of the Trade Union Congress, Mr. Peter Esele, said the President should fulfil his promise.
He stated, “The people involved are just waiting for some form of assurance to take off. The President should take that step to commence action on it.
“He has made a promise, those people want to do it, but they want a guarantee from the government. It is important for the President to give them this before they start. It is incumbent on the President to break the ground for those refineries to be built. This thing has to do with credibility.”
He expressed surprise over the N161bn supplementary budget on fuel subsidy the President submitted to the National Assembly.
Esele said that there was the need to address the corruption in the fuel subsidy regime.
According to him, based on the increase in the pump price of fuel by 60 per cent in January, the amount spent on fuel subsidy should have reduced.
He said, “The thing came to me as a surprise because the pump price was increased by 60 per cent in January. When we had N1.7trn, there was so much corruption in the system. And now that we are getting the corruption out of the system, the subsidy should come down drastically.
“At least, it should reduce by over N500bn. It is expected that pump price would have reduced. With this additional demand, there is the impression that there is still corruption in the management of the subsidy.”
On her part, the president of the Campaign for Democracy, Dr. Joe Okei-Odumakin, described the present government as profligate.
She said, “To spend N1trn on subsidy in a year at N32 per litre tax, which was imposed on petroleum, is the height of fiscal recklessness.
“No country that runs on this template can make a progress.”
The Petroleum and Natural Gas Senior Staff Association of Nigeria has also urged the FG to repair existing refineries and build new ones.
The group warned that import-driven deregulation would ruin the nation’s petroleum industry.
President of the association, Babatunde Ogun, said, “We call on the government to ensure that the existing refineries perform optimally and new ones are built within a specified time frame. It does not have to be giant refineries, but pockets of refineries across the country, especially in the oil-producing states.
“Similarly, operators in the upstream sector must be made to refine a specific percentage of their allocations locally.”
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Jonathan, sell the refineries now
November 26, 2012 by Editorial Board
Minister of Petroleum Resources, Mrs. Diezani Alison-Madueke
ANOTHER damning report has exposed the depth of corruption in the Nigerian oil and gas sector. The Idika Kalu National Refineries Special Task Force, like previous reports, revealed the dismal state of Nigeria’s four government-owned refineries, thus depicting how colossal funds spent on their Turn Around Maintenance have gone down the drain. The revelations in the report are serious ones that cannot easily be dismissed.
The report claimed that Nigeria had the third largest refining capacity on the continent with its 445,000 barrel per day installed capacity, but had 18 per cent capacity utilisation and efficiency, compared to South Africa with a capacity of 540,000bd and capacity utilisation of 85 per cent and Egypt with 774,900bd capacity and 81 per cent efficiency level. The report then made a watertight case for the sale of the moribund state-owned refineries.
The Kalu committee further revealed that, of the 42 oil refineries operating in Africa, the three in Nigeria recorded the worst performance in terms of efficiency and capacity utilisation. By the Nigerian National Petroleum Corporation’s admission, the combined average refining capacity utilisation for 2010 was 21.53 per cent as against 10.90 per cent in the previous year. The figure for 2008 was 24.11 per cent, which is 51.34 per cent more than that of 2007. Even the marginal improvement in capacity utilisation was achieved at a huge cost.
It is no longer news that the country’s four refineries barely function, which is all right for those with sufficient political connections to make big fortunes from imported fuel. Every successive government had also had its share of the juicy TAM contracts, most of them in a dubious manner. While the late dictator, Gen. Sani Abacha, awarded a major contract valued at $215 million in 1997 for Kaduna refinery alone, the Abdulsalami Abubakar administration in 1998 set aside $92million for the refineries without achieving any result. During President Olusegun Obasanjo’s first term (1999 – 2003), it was estimated that between $254million and $400.4million was wasted on the rehabilitation of the refineries and pipelines. In 2007, the TAM contract for Kaduna alone cost about $24 million in cash and materials worth $30 million, bringing the total to about $54 million. The record is shockingly awful.
Curiously, that is exactly what the Federal Government is planning to do again. The $1.6 billion Alison-Madueke TAM is expected to begin in January 2013 and is scheduled for completion in October 2014. Nothing will come out of it, except opening up another avenue for graft. That the original firms which built the refineries have been contracted by the Ministry for the purpose, as repeatedly emphasised by Alison-Madueke, is immaterial. It is more like an old wife’s tale. The experience since 1999, with hundreds of millions of dollars appropriated yearly for TAM but without results, is enough to establish the futility of further cash injections.
Why is it that oil firms operating in the country run oil refineries elsewhere and refuse to do so here? Singapore, with its total oil-refining capacity of 1.3 million bpd, is a major oil refining and trading hub in the region, but has no oil deposit. India imports 70 per cent of its crude oil requirements, mostly from Middle East. However, the country is not only self sufficient when it comes to refining the crude oil but is also able to export refined petroleum products.
It is not the right thing to do for government to build new refineries or even repair the existing ones. As the Finance Minister, Ngozi Okonjo-Iweala, rightly suggested, the private companies that have been issued licences to build their refineries should be encouraged. The Kalu committee’s recommendation that the refineries should be sold within 18 months should be implemented. All over the world, refineries are changing hands on a regular basis.
Among other deals, British Petroleum just recently sold its Texas City Refinery in the US to Marathon Petroleum Corporation for $2.5 billion. In April, Delta Airlines announced that it was buying a closed 185,000 bbl/day Phillips refinery in the Philadelphia area, United States for $180 million, and would spend $100 million to get it back up and running. Let the buyers of Nigeria’s obsolete refineries use their money to do the TAM, as was the case with Delta Airlines and Phillips refinery deals.
This grand fraud must end. The proposed $1.6 billion TAM for the refineries is uncalled-for and should be dropped. Billions of dollars earmarked for renovating refineries have vanished over the years. This $1.6 billion is also up for grabs. Nigerians have had enough of the Federal Government’s insincerity and intrigues on the refineries. It is deeply troubling that Alison-Madueke & Co are still fixated on wasting resources on them. It can’t work.
The Federal Government needs to create an enabling investment environment to encourage the private sector, through various incentive packages, for the establishment of private oil refineries for domestic consumption and export. The stringent requirements for establishment of private refineries must be reviewed. As Ghana has done, all that should be required for a private refinery are proof of funding for the project; technical capability of the company; refinery configuration and products specifications for the refinery and evidence of land allocation.
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N5tn stolen under Jonathan –Investigation
November 25, 2012 by TOYOSI OGUNSEYE, ALLWELL OKPI and LEKE BAIYEWU 138 Comments
President Goodluck Jonathan
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Over N5tn in government funds have been stolen through fraud, embezzlement and theft since President Goodluck Jonathan assumed office on May 6, 2010, a SUNDAY PUNCH investigation has found.
Our correspondents arrived at the stolen sum after poring over the reports of the various committees set up by the President to probe some sectors of the economy, particularly oil and gas. SUNDAY PUNCH also relied on disclosures by some senior government officials.
Five trillion naira is the summation of government funds said to have been stolen, according to the Mallam Nuhu Ribadu-led Petroleum Task Force report; the Minister of Trade and Investment’s report on stolen crude; the House of Representatives fuel subsidy report and investigations into the ecological fund, SIM card registration and frequency band spectrum sale.
The Ribadu report on the oil and gas sector put daily crude oil theft at a high 250,000 barrels daily at a cost of $6.3bn (N1.2trn) a year. This puts the total amount lost through oil theft in the two years of Jonathan’s government at over $12.6bn (N2trn).
Oil theft is common in the Nigerian oil and gas sector. In June, a special naval team impounded a French ship, MT Vannessa, at Brass Loading Terminal, Bayelsa State, for allegedly stealing 500,000 barrels of crude oil per day from the country.
Our sister publication, SATURDAY PUNCH, had reported that the suspects, in their confessional statements, indicted some political office holders, many fuel marketers and some officials of the Nigerian National Petroleum Corporation and Department of Petroleum Resources.
In October, Minister of Trade and Investment, Dr. Olusegun Aganga, in a letter to the President, said 24 million barrels of oil worth $1.6bn (N252bn) was stolen between July and September.
According to Aganga, his signature was forged on the Export Clearance Permit that was used to export the crude oil from Nigeria.
Confirming that oil theft was depleting Nigeria’s resources, the Minister of Finance, Dr. Ngozi Okonjo-Iweala, in May, said the government lost a fifth of its oil revenues to theft in April.
Apart from income lost through oil theft, the Ribadu report also said ministers of Petroleum Resources between 2008 and 2011 handed out seven discretionary oil licences and that government lost $183m (N29bn) in signature bonuses via these deals.
The Ribadu panel discovered that three of the oil licences were awarded under the current petroleum minister, Mrs. Diezani Alison-Madueke, who took up her position in 2010. Alison-Madueke, however, denied knowledge of the discretionary awards.
Shortly before the Ribadu report, the House of Representatives had raised the alarm that the N2.6trn the Federal Government paid for oil subsidy in 2011 could not be properly accounted for.
The House said, “Fuel subsidy payments amounted to N261.1bn in 2006, N278.8bn in 2007 and N346.7bn in 2008, but, even after the subsidy on diesel had been removed, the ‘subsidy’ payments jumped to N2.58trn in 2011 — more than 900 per cent of the sum appropriated for the year (N245bn).”
A subsequent report by the Presidential Committee on Verification and Reconciliation of Fuel Subsidy Payments, led by Mr. Aigboje Aig-Imoukhuede, revealed that in 2011, 197 subsidy transactions worth N232bn were illegitimate.
These frauds are not limited to the oil industry, as similar probes have shown that almost all sectors are involved.
In July, the House of Representatives Committee on Environment discovered a tree seedling fraud worth N2bn awarded by the Ecological Fund office.
Chairman of the committee on environment, Mrs. Uche Ekwunife, said this during an investigative hearing on the mismanagement of ecological funds for the development of tree nurseries and seedlings in the 36 states.
According to her, out of the N3bn approved by the Presidency in 2010, N2bn was released to the contractors and consultants without government getting value.
Minister of Environment Hadiza Mailafia, however, said the contract was awarded by her predecessor.
In the telecommunications sector, the House instituted a probe into the sale of the frequency brand spectrum, which was reportedly sold for less than its value.
The 450MHz frequency, which was valued at over $50m, was allegedly sold for less than $6m (a difference of $44m or N6.9bn) by the Nigeria Communications Commission.
In the same sector, the reps, earlier this year, commenced investigations into the N6.1bn SIM card registration project embarked upon by the NCC in 2011.
The investigation followed the delay in completing the exercise and the request by NCC for additional N1bn for the project in its 2012 budget.
The lawmakers insisted that the NCC had no business embarking on the project since various service providers were already registering their subscribers.
Deputy Chairman, House Committee on Communications, Mr. Usman Bawa, had said, “The NCC has no business with SIM card registration. Apart from that, the service providers have done about 80 per cent of the registration because they started before the NCC. To me, for the regulatory body to be involved in the registration is a duplication of effort, a waste of resources and time.
“Even, the manner with which the bill for the N6.1bn was passed during the Sixth Assembly showed that there was more to it than meets the eyes. From our investigations, from which our report was compiled, our interactions with the NCC contractors for the SIM card registration and the service providers, a lot has been exposed and this was part of the reason why we removed the N1bn that was budgeted for the same SIM card registration in the last budget.”
It would be recalled that the then Minister of Information and Communication, Prof. Dora Akunyili, had, in August, 2010, agreed that the amount budgeted for SIM card registration was exorbitant.
Reacting to the massive frauds that have greeted Jonathan’s tenure, Transparency International, told one of our correspondents that Nigeria would continue to slack in development as long as it keeps paying lip service to the fight against corruption.
It said via electronic mail, “President Jonathan should insist that those accused of corruption are properly investigated and punished if found guilty, irrespective of their positions and connections. The judiciary must be seen as impartial and fair.
“To signal a break with the past, the government should set up an independent investigatory panel to review charges of corruption within government and the private sector. President Jonathan should endorse the panel and commit to ensure it has both the scope and the power to investigate and prosecute.
“This is not just a matter of justice; fighting corruption can affect the lives and livelihoods of millions of people. The current culture of corruption hurts the majority of Nigerians while the inequality gap widens.”
Also speaking to SUNDAY PUNCH, the Director, Centre for Applied Economics, Lagos Business School, Prof. Pat Utomi, said the spate of corruption in the country was unprecedented.
The political economist argued that prosecution and jail terms for corrupt individuals would not be as effective as building a societal institution that would prevent corruption.
A former Vice Chancellor, Crescent University, Prof. Sheriffdeen Tella, also warned that corruption would spell doom for the country if the trend continued.
He said, “It is unfortunate that the country will not be able to meet the Millennium Development Goals. There is a need for the masses to hold a three-day protest against corruption to force government to prosecute those indicted for corruption.”
Similarly, Executive Chairman, Coalition Against Corrupt Leaders, Mr. Debo Adeniran, said, “For Jonathan to fight corruption, he must start with his cabinet. The way Jonathan is going about his campaign against corruption is not the best way to go about it.”
A global audit and financial advisory firm, KPMG, had on Thursday stated that Nigeria accounted for the highest number of fraud cases in Africa in the first half of 2012.
The cost of fraud in the country during the period was put at $1.5bn (N225bn).
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Fed Govt, firm to build six refineries
By Franca Ochigbo, Abuja 17 hours ago
Minister of Trade and Investment,Olusegun Aganga
• Work to cost N697.5b • Two ready in 12 months
The Federal Government yesterday signed a Memorandum of Understanding (MoU) with an American and Nigerian Joint Venture Group, Vulcan Petroleum Resources Limited and Petroleum Refining and Strategic Reserve Limited, for the construction of six modular refineries with combined capacity of 180,000 barrels daily.
The project is estimated to cost N697.5billion ($4.5billion), while two of the refineries are expected to be completed in the next one year. The refineries are to be located in areas where there are crude oil pipelines in collaboration with the Nigerian National Petroleum Corporation (NNPC).
Each refinery, when completed, will refine up to 30, 000 barrels of crude oil daily, and produce up to five million litres of petrol, diesel, kerosene and LPFO.
The Minister of Trade and Investment,Olusegun Aganga, signed on behalf of the Federal Government, while Vice-President, Director, Vulcan Petroluem Resources Limited,Jim Mansfield and the Chairman, Petroleum Refining and Strategic Reserve Limited, Chief Edozie Njoku, signed on behalf of their companies.
Aganga said the event represented a milestone and paradigm shift in President Goodluck Jonathan’s administration’s plan towards industrial revolution, job creation and wealth generation.
He said: "This is a historic moment and a big step for us as a country. Apart from power, one of the critical areas which President Goodluck Jonathan has made a priority, is to have functional refineries. My understanding is that by the time the project is completed, the cost is estimated at $4.5 billion.
"This is the beginning of changing our old paradigm from exporting just raw materials and exporting jobs to the western countries.This is something that we have done as a country for so long a time, he said, adding that there is no nation that has moved from being a poor nation to a rich one by exporting raw materials without having a vibrant industrial base."
He assured that the Ministry of Trade and Investment would work with the Ministry of Petroleum Resources and the NNPC to ensure the actualisation of the projects.
"The Nigerian Industrialisation Revolution Plan is based on areas where we have comparative and competitive advantage as a country. The signing of the MoU is the beginning of the process," he stated.
He said the Ministry of Trade and Investment has not done this alone. "We are working with the Ministry of Petroleum Resources and the NNPC. We are working as a team to ensure that in 12 months, we will witness the commissioning of the refineries.
"What we have done is to carry out due diligence on the prospective investors before we even start having discussions with them. We try to find out where they are coming from and their antecedents; whether they have done what they are planning in other parts of the world and also, if they have the money to invest," he stressed.
Also speaking, Mansfield said the investment is a testimony that Nigeria is a good place to do business.
He said the funding for the project is coming from investors, who firmly believe that Nigeria is a good place to do business.We also believe that Nigeria is open for business.
The Chairman, Petroleum Refining and Strategic Reserve Limited, Mr Chief Edozie Njoku, said the firm would work with its foreign technical partner and the regulatory authorities to ensure the successful completion of the project in the timeframe.
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Nigeria's Largest Onshore Oil Well Discovered In Imo State by **osisi(f):
Local firm, Addax, strikes oil in Imo
Nigeria's oil and gas industry has recorded another landmark, with Addax Petroleum announcing an onshore oil discovery from the Njaba 2 well (formally Okaka) currently drilling in the eastern part of the OML124 license area of Imo State. Addax Petroleum has a 100 per cent working interest under a Production Sharing Contract (PSC) covering the Oil Mining License 124 (OML124) area, whereby the Nigeria National Petroleum Corporation (NNPC) is the concessionaire. The new discovery may likely become one its largest fields in Nigeria. Addax currently produces approximately 6000 barrels per day from the Ossu and Izombe fields in OML124, which is located within Imo State. President and Chief Executive Officer of Addax, Mr. Jean Claude Gandur said, "I am extremely proud to report an excellent start in 2009 with this successful exploration result in Nigeria as it is a leading discovery that has the potential to be one of our largest fields in Nigeria. The Njaba discovery is the first exploration well to be drilled in OML124 since the mid-80's and these results will increase the production potential of the license area considerably, as well as significantly upgrade the remaining undrilled prospects."http://www.scandoil.com/moxie-bm2/news/addax-petroleum-hits-new-discovery-in-nigeria.shtml
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Shell to build $3.5bn gas plant in Imo state
June 28, 2012 by Stanley Opara
The shell Petroleum Development Company has concluded plans to build a $3.5bn gas plant in Imo state.
Briefing Governor Owelle Rochas Okorocha during a courtesy visit by the management of SPDC to the governor in Owerri, the Managing Director, Mr Mutiu Summonu, said the Assa – North, Ohaji-South Gas supply project was in line with the local gas content policy of the Federal Government to boost power generation in the country.
He said the gas plant on completion would supply domestic gas to power energy plants across the country as well as generate massive job opportunities for Nigerians. The Shell boss further disclosed that the project would be executed in two phases and would be completed in 2018.
While soliciting for the collaboration of the state government in the handling of the project, Summonu also urged the government to play its part by providing 200 hectares of land for the project, enabling and secure environment for the expatriates and workers and ensure a healthy collaboration between SPDC and the host communities. He promised that his company would always live up to expectation in the area of Corporate Social Responsibility in the course of executing the project.
In his speech, Okorocha who was excited about the development assured the SPDC team that the state government would definitely play its part to ensure immediate commencement of the project.
The governor enumerated how SPDC began its operations in Nigeria when gas was first discovered at Iho, Ikeduru LGA in Imo State and urged the company to show enough presence by building a befitting corporate office in the state.
Okorocha further assured all adequate security, good working relationship with host communities as well as general hospitality to SPDC.
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NNPC revives 3 refineries to end fuel scarcity
Written by Hassan Ibrahim, Kaduna Wednesday, 04 April 2012
THE Group Executive Director (GED), Refining and Petrochemical, Nigerian National Petroleum Corporation (NNPC), Mr Philip Chukwu, in Kaduna, on Tuesday, said with the coming on stream of the three major refineries in Warri, Port Harcourt and Kaduna, fuel scarcity in Nigeria would soon be history.
The NNPC executive, while embarking on a facility tour of the Kaduna Refinery and Petrochemical Company (KRPC), said the full operation of the three refineries in the country was a miracle.
“We have seen the Kaduna refinery increase production from very low level to what we have now, about three million litres of petrol daily. Let me commend the managing directors of the three refineries on what they have done.
“As we speak today, all the three fluid catalytic cracking units (FCCUs) are working in the refineries. And this is the first time this has happened after about 14 years,” he said.
“Kaduna refinery is now working perfectly well, we have tested the equipment for over a month now and the condition is perfect,” he said.
Chukwu said the refinery was strategic for the supply of fuel to the North, especially the North-West and North-Central, adding that “as long as Kaduna is producing, it will reduce the cost of our business.”
Earlier, the Managing Director of KRPC, Mr Bolanle Ayodele, had said the catalytic reforming unit (CRU), which was shut down in November 2011 for re-tubing, was re-streamed on March 31, 2012.
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Auditor-General admits mass fraud in revenue remittances to govt
TUESDAY, 24 JANUARY 2012 00:00 FROM JOHN-ABBA OGBODO (ABUJA) NEWS - NATIONAL
•Says oil firms undertake self-assessment of royalties
•Finds N11b gap in customs’ returns
LARGE-scale fraud in revenue calculation, collection and remittance to the Federal Government by some revenue-generating agencies and oil firms have been confirmed by the Auditor-General of the Federation (AGF) Samuel Ukura.
In the 2009 report now before the National Assembly, Ukura said sharp practices characterised the calculation of the revenue accruing from the oil sector to the Federation Account.
He said significant differences also existed in the figures of revenue remitted to the Federation Account by the Nigeria Customs Service (NCS).
The report is titled: “Yearly report of the Auditor General for the Federation on the Accounts of the Federation of Nigeria for the year ended December 31, 2009.”
Under a sub-head: “Wrong basis of calculating royalties and failure of Department of Petroleum Resources (DPR) to raise assessment,” Ukura said “during the audit examination of accounting and other records at the DPR for the Federation Account, the computation of royalties payable by oil companies was based on actual crude oil lifted by them and not calculated on actual production figures contrary to the provisions of the Memorandum of Understanding (MoU) with the relevant oil companies.”
The MoU provide that payment of royalties should be based on production volume multiplied by the prescribed royalty rates, he said.
According to him, the DPR had shirked its responsibility of raising the assessments on royalties and sending the demand notices to the oil firms for prompt settlement. “Rather, the oil companies are allowed to engage in the self-assessment of royalties payable by them. This action is obviously detrimental to the interest of the country.”
In the report, which The Guardian obtained in Abuja yesterday, the AGF said the attention of the Accountant-General of the Federation had been drawn to “this anomaly.”
The AGF said oil companies in Nigeria owed the government huge sums of money in local and foreign currencies. “Audit investigation revealed that the sum of N1.148 billion on penalty on gas flared and $795.309 million on royalties on crude oil were owed by various oil companies as at December 2009.”
The report also indicated that there were several instances of late remittance and non-payment of penalties by banks to the Federal Inland Revenue Service (FIRS).
“Audit examination of the accounting records maintained for the Federation Account at the FIRS, revealed that the collecting banks were in the habit of late remittance of actual collections to the Central Bank of Nigeria (CBN) thereby contravening the agreement between FIRS and the collecting banks.
“Also, there was no documentary evidence to authenticate the payment of penalties and interests totalling N172.655 million to the Federation Account.”
Ukura added that some money generated from over-recovery was not remitted to the Federation Account.
“The sum of N3.307 billion being the balance in the CBN statement for over-recovery in respect of the Petroleum Support Fund (PSF) Account as at December 31, 2009, which should have been paid back into Federation Account by Petroleum Product Pricing Regulatory Agency (PPPRA) was yet to be transferred to the Federation Account as at December 1, 2009. However, this amount was inclusive of N1.765 billion owed to a private oil company, which was said to be under litigation,” the report stated.
Ukura noted that the Federation Account Allocation Committee (FAAC) had not been rendering its yearly report to the National Assembly as required by the law.
In the case of NCS, the report states: “Audit examination of the records maintained for the Federation Account at the NCS revealed discrepancies between the figures of revenue generated obtained from the Customs and the figures of revenue remitted to the Federation Account by NCS obtained from the CBN components. The discrepancies arose from the figures of nine months - January, February, April, May, June, July, August, September, and December, which indicated that NCS remitted less than the revenue collected during the period to the government. While the figures for the three months - March, October and November indicated that the NCS remitted more than the revenues collected during the period to the Federation Account, which gave rise to a total net difference of N11.122 billion,” the report stated.
Meanwhile, a member of the House of Representatives, Mr. Segun Williams, has doubted the sincerity of the government’s efforts in the ongoing probe of the petrol subsidy scam.
He said for Nigerians to be convinced that the government meant well, the Petroleum Minister, Mrs. Alison-Madueke, should step down as a check against any interference with the probe.
The lawmaker told reporters in Abeokuta, Ogun State yesterday that as at now, the government was yet to find solution to the terrorist activities of the Boko Haram sect and urged dialogue with the group.
And a week after Governor Adams Oshiomhole of Edo State announced the reduction of the school fees in the state-owned Ambrose Alli University in Ekpoma as part of the palliatives to cushion the effects of the recent partial removal of subsidy on petrol, two leaders of the Peoples Democratic Party (PDP), Prof. Julius Ihonvbere and Vincent Akhere, have described the move as “cosmetic.”
Ihonvbere, a governorship aspirant of the party, stated this yesterday in a chat with journalists where he also debunked rumours that he may leave the PDP if he fails to clinch the ticket.
He said going by the position of the leaders of the party that the primaries would be free and fair, he was sure of winning the contest.
The politician asked: “Does the state government have bursaries and scholarships for the students? Has he (governor) fixed the libraries and the laboratories? Are the hostels’ conditions okay, does he respect students and teachers’ unionism? Does the university have a substantive vice chancellor, registrar, bursar now?”
Akhere also carpeted Oshiomhole for the N150.9 billion appropriation bill for 2012, saying the budget was solely proposed to prosecute his governorship election in July.
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Govt cuts petrol price to N97
MONDAY, 16 JANUARY 2012 00:00
FROM MADU ONUORAH, JOHN-ABBA OGBODO (ABUJA) AND WOLE SHADARE (LAGOS) NEWS - NATIONAL
To prosecute culprits of fraud
“AFTER due consideration and consultations with state governors and the leadership of the National Assembly, government has approved the reduction of the pump price of petrol to N97 per litre,” President Goodluck Jonathan said this morning.
He disclosed this in his second address to the nation in two weeks on the deregulation of the downstream sector of the oil and gas industry.
The measure which led to the removal of the contentious fuel subsidy and engendered a rise of the pump price of premium motor spirit (PMS) or petrol from N65 to more than N140 precipitated, since last Monday, a disruption of economic activities nationwide following a strike and protests called by Labour and its civil society allies.
Various talks held at different levels in search of a solution were deadlocked as both sides apparently did not shift grounds and Labour decided to continue its action.
But yesterday evening before Jonathan unfolded the new N97 price, he held an emergency meeting with governors and some members of the Federal Executive Council (FEC).
Governors in attendance included those of Anambra, Akwa Ibom, Benue, Imo, Katsina, Kaduna, Bauchi, Cross River, Kogi, Sokoto, Edo, Enugu, Delta, Rivers, Ebonyi, Delta, Nasarawa, Oyo, Ogun, Niger, Taraba, Zamfara, Lagos, Gombe, Kebbi, Plateau and Jigawa.
Others in the meeting were Vice President Namadi Sambo and Secretary to the Government of the Federation, Chief Anyim Pius Anyim. The Ministers participating included Finance (Dr. Ngozi Okonjo-Iweala), Petroleum Resources (Deziani Alison-Madueke), Labour and Productivity (Emeka Wogu) and Information (Labaran Maku).
He was also billed to meet again with Labour leaders last night and make a nationwide broadcast afterwards.The meeting between Jonathan and the governors ended at about 8.50 p.m. Midway into the meeting, they were joined Senate President, David Mark, his deputy, Ike Ekweremadu and the Senate Leader, Ndoma-Egba.
The President, had after the wreathe-laying ceremony marking the end of the 2012 Armed Forces Remembrance Day at the National Arcade, Abuja retired to his official residence. He was later joined by Defence and security chiefs in a meeting.
Those in attendance at the meeting included the National Security Adviser (NSA), Gen. Andrew Owoye Azazi, Chief of Defence Staff (Air Chief Marshal Oluseyi Petinrin), the Service Chiefs – Lt.-Gen. Azubike Ihejirika (Army), Vice Admiral Ola Sa’ad Ibrahim (Navy) and Air Marshal Mohammed Dikko Umar (Air Force) and the Inspector General of Police, Hafiz Ringim.
It was after the meeting with the security chiefs that he moved to the Council Chambers of the Villa where the parley with the governors took place.
A two-day break from the ongoing strike over increase in the prices of petroleum product declared by Labour ended yesterday.
Also Mark summoned a meeting over the issue in his residence yesterday. At the meeting were Deputy Senate President Ekweremadu, House of Representatives Speaker Aminu Tambuwal, Deputy Speaker Emeka Ihedioha, Governors Rotimi Amaechi and Peter Obi of Rivers and Anambra states as well as Anyim, Alison-Madueke and Nwogu.
Speaking after the meeting, Amaechi expressed confidence that a solution would soon be found to the problem.
He said: “I believe that solutions would be found to the strike. I believe that we are at the verge of finding a solution to it.
“We have held a meeting and we have looked at the solutions and we think that with Labour, we can find a joint solution to the problem and you must realize first that the President is patriotic in his decision and all of us in government are backing him. Labour agrees to deregulation. I don’t know if there is any point that they are not part of deregulation. Their argument is how and when and we are sorting out all those fine details and we will find solution to it.”
The full text of the President’s address this morning:
“Dear Compatriots,
“This is the second time in two weeks I will address you on the deregulation of the downstream petroleum sector. In the last seven days, the nation has witnessed a disruption of economic activities. Although, the economic imperatives for the policy have been well articulated by government, the Nigerian Labour Congress (NLC) and the Trade Union Congress (TUC) went ahead to declare a nationwide strike.
“There was also near-breakdown of law and order in certain parts of the country as a result of the activities of some persons or groups of persons who took advantage of the situation to further their narrow interests by engaging in acts of intimidation, harassment and outright subversion of the Nigerian state. I express my sympathy to those who were adversely affected by the protests.
“At the inception of the deregulation policy, Government had set up the Justice Alfa Belgore Committee to liaise with Labour and other stakeholders to address likely grey areas in the policy, but despite all our efforts, Labour refused the option of dialogue and also disobeyed a restraining order of the National Industrial Court of Nigeria.
“However, following the intervention of the Leadership of the National Assembly, and other well-meaning Nigerians, Labour accepted to meet with government, but this yielded no tangible result.
“It has become clear to government and all well-meaning Nigerians that other interests beyond the implementation of the deregulation policy have hijacked the protest. This has prevented an objective assessment and consideration of all the contending issues for which dialogue was initiated by government. These same interests seek to promote discord, anarchy, and insecurity to the detriment of public peace.
“Government appreciates that the implementation of the deregulation policy would cause initial hardships and commends Nigerians who have put forth suggestions and credible alternatives in this regard. Government also salutes Nigerians who by and large, conducted themselves peacefully while expressing their grievances. Let me assure you that government will continue to respect the people’s right to express themselves within the confines of the law and in accordance with the dictates of our democratic space.
“Government will continue to pursue full deregulation of the downstream petroleum sector. However, given the hardships being suffered by Nigerians, and after due consideration and consultations with state governors and the leadership of the National Assembly, government has approved the reduction of the pump price of petrol to N97 per litre. The Petroleum Products Pricing Regulatory Agency (PPPRA) has been directed to ensure compliance with this new pump price.
“Government is working hard to reduce recurrent expenditure in line with current realities and to cut down on the cost of governance. In the meantime, government has commenced the implementation of the Subsidy Reinvestment and Empowerment projects: including the Federal Government- assisted mass transit programme which is already in place, and job creation for the youth.
“Furthermore, the legal and regulatory regime for the petroleum industry will be reviewed to address accountability issues and current lapses in the Industry. In this regard, the Petroleum Industry Bill will be given accelerated attention. The report of the forensic audit carried out on the NNPC is being studied with a view to implementing the recommendations and sanctioning proven acts of corruption in the industry.
“Let me assure Nigerians that this administration is irrevocably committed to tackling corruption in the petroleum industry as well as other sectors of the economy. Consequently, all those found to have contributed one way or the other to the economic adversity of the country will be dealt with in accordance with the law.
“My dear compatriots, I urge you to show understanding for the imperatives of the adjustment in the pump price of petrol and give government your full support to ensure its successful implementation. I further appeal to Nigerians to go back to work and go about their normal duties as government has made adequate arrangements for the protection of life and property throughout the federation.
“Government will not condone brazen acts of criminality and subversion. As President, I have sworn to uphold the unity, peace and order of the Nigerian State and by the grace of God, I intend to fully and effectively discharge that responsibility. Let me add that we are desirous of further engagements with Labour. I urge our Labour leaders to call off their strike, and go back to work.
“Nigeria belongs to all of us and we must collectively safeguard its unity.
“Thank you. God bless the Federal Republic of Nigeria.”
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OIL AND GAS INDUSTRIAL ZONE TO BE ESTABLISHED IN IMO
Posted: 11-Oct-2011 [17:50:16] by Online Unit
Owelle Anayo Rochas Okorocha
An oil and Gas Industrial zone is to be set up in Imo State.
Making this disclosure in a meeting with Oil and Gas operators held at Government House, Owerri recently, the Imo State governor, Owelle Rochas Okorocha expressed his administration’s resolve to provide an enabling environment for the companies to operate. He disclosed that over 7.8 trillion SCE of Natural Gas deposits and several billion barrels of crude oil in various blocks are available in the State adding that his government would continue to work closely with the Federal Government of Nigeria to ensure that the unutilized marginal fields are availed to interested operators.
He urged oil companies already operating in the State to support government programmes and efforts through demonstration of increased corporate social responsibility in their areas of operation and to address several complaints of oil spillage and pollution resulting from their operations. Said he; “The status of your current operation in Imo State may very well be described as ‘absentee operator’ with little or no developmental effects in the State. We therefore encourage you to become more visible in the State by establishing functional offices in Owerri and offer support for power generation, at least 25 mega watts in the Owerri Industrial cluster”.
In her contribution, the Minister of Finance, Dr. Ngozi Okonjo-Iweala, who attended the meeting to give federal government support urged Oil and Gas Operators to queue into the visions of governor Rochas Okorocha by showing adequate presence in the State.
She described Oil and Gas as key sector of the economy and pointed out the need for the proceeds to be used in diversifying other sectors of the economy adding that governor Okorocha’s background as a private sector operative would be an advantage to the operators to maximize their operations in Imo State.
Dignitaries present at the meeting include Chairman of Oranto Oil, Prince Arthur Eze, Chairman MTN and Diamond Group Advisory Board, Mr. Paschal Dozie , Chairman Owel-Linkso Group, Mr. Charles Osezua as well as the representatives of Agip, Shell, Cheveron and the Nigeria National Petroleum Company (NNPC)
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Govt plans to swap N192b crude with India for power plant
WEDNESDAY, 19 OCTOBER 2011 00:00 BY SULAIMON SALAU, WITH AGENCY REPORTS BUSINESS SERVICES - ENERGY REPORT
INDICATIONS emerged at the weekend that the Federal Government was nursing the agenda of swapping crude for power generation with India. This came to limelight when the Indian State-owned Bharat Heavy Electricals Limited expressed its commitment to build a 1000Mega Watts coal power plant in Nigeria.
The report published by Livemint said the projects proposed in Nigeria and Uganda was part of India’s plans to broaden economic engagement with African countries to secure access to oil and gas blocks in the continent.
A Bhel top official was quoted as saying the company plans to develop Nigeria’s first coal power project for the Power Holding Company of Nigeria, adding that it is presently preparing a feasibility report for the 1,000MW project, which will require an investment of around $1.2 billion.
The source said payment in crude was one of the options being considered under the contractual terms, since India is a net exporter of crude from Nigeria.
“The feasibility report will be submitted to the Nigerian parliament. The project will have four units of 250MW each. Though Nigeria has a lot of gas in the Niger delta region. They have been unable to use gas for power generation due to repeated terrorist attacks, which have damaged the pipeline infrastructure. India is a net importer of crude oil from Nigeria. Payment in crude is also one of the options,” the source said.
Nigeria has 36.2 billion barrels of proven oil resources and is a member of the Organization of Petroleum Exporting Countries (OPEC). It has the second largest hydrocarbon reserves in Africa after Libya. Of 163.594 million tonnes (mt) of crude oil imported by India in 2010 and 2011, 15.81 mt came from Nigeria. India is emulating China’s strategy of expanding its influence in Africa by building infrastructure in the continent, which is estimated to have 10 per cent of global oil reserves but is facing a severe power shortage.
India depends on imports to meet its oil needs and is particularly vulnerable to price volatility in crude oil. As the world’s fifth largest energy consumer, India imports 80 per cent of its requirements and accounts for around 3.5 per cent of the global consumption of crude.
Bhel has separately partnered with private sector companies, Hindustan Construction Company Limited (HCC) and Abir Infrastructure Pvt. Limited for developing the 700MW Karuma hydropower project in Uganda at an investment of around $1.5 billion.
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Oil giant BP reaches 'turning point'
Chief executive Bob Dudley: "We're turning taps back on in many of our high margin fields"
Oil giant BP has announced a big rise in third-quarter profits and says it has reached a "turning point" for its oil and gas operations and production.
BP reported third-quarter profits of $5.14bn (£3.2bn), a near tripling of the $1.85bn replacement cost profit it made in the same period a year ago.
Chief executive Bob Dudley said operations were "regaining momentum" and the firm had "greater confidence".
BP's profits and reputation were hit by last year's Gulf of Mexico oil spill.
The firm is also increasing its asset selling programme from $30bn to $45bn.
It had decided to sell non-core assets in order to pay for the clean-up operation in the Gulf of Mexico and to compensate victims.
'Firm foundations'
BP's profits were helped by higher oil prices, with Brent crude currently trading at $110 a barrel, compared with $84 a barrel in October 2010.
This helped to offset lower production levels.
Oil production in the July to September period fell by 12% on the same quarter last year to 3.3m barrels per day, due to the suspension of production in the Gulf.
It was only last week that BP won approval to resume drilling in the Gulf of Mexico, 18 months after the Deepwater Horizon disaster.
Even allowing for the businesses BP is selling, production fell by 8%, but the company said it expected output to pick up in the fourth quarter.
"The past year has been unprecedented in its challenges, and BP has responded well," said Mr Dudley.
"We have laid firm foundations for the future - in safety, in our organisation and in developing new growth opportunities.
"As our extended turnaround programme moves towards completion we are seeing production return, particularly from Angola, the UK North Sea and the US Gulf of Mexico, where we produce our higher-value barrels."
Shares in BP were up 2.8% in afternoon trading.
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