A
total of $183m (N28.73bn) in signature bonuses paid by oil companies to the
federation is missing, according to a confidential report seen by Reuters.
A team headed by the former Chairman,
Economic and Financial Crimes Commission, Mallam Nuhu Ribadu, produced the
146-page study based on the Ministry of Petroleum Resources’ request. It covers
the year 2002 to 2012.
The report said that Ministers of
Petroleum Resources between 2008 and 2011 handed out seven discretionary oil
licences, but that $183m in signature bonuses was missing from the deals.
Three of the oil licences were awarded
since the current minister, Mrs. Diezani Alison-Madueke, took up her position
in 2010, according to the report.
“I have not given any discretionary
awards during this administration,” Alison-Madueke told Reuters, although she added that the
President had the right to do so instead of using bids if he saw fit.
“That is entirely up to him,” she
said.
Nigeria is Africa’s largest crude oil
exporter, shipping more than two million barrels per day, and is also home to
the world’s ninth biggest gas reserves and one of its largest Liquefied Natural
Gas export terminals.
The report provides new details on the
nation’s long history of corruption in the oil sector, which has enriched its
elite and provided the oil majors with hefty profits, while two thirds of the
people live in poverty.
Alison-Madueke, told Reuters on Tuesday that she received the
report last month but that it was a draft and the government was still supposed
to give input.
The one seen by Reuters was labelled “Final Report.”
The report concluded that oil majors,
Shell, Total and Eni, made bumper profits from cut-price gas, while oil
ministers handed out licences at their own discretion. This, while not illegal,
did not follow best practice of using open bids.
Hundreds of millions of dollars in
signature bonuses on those deals were also missing, it said.
“We have not seen this report and are,
therefore, unable to comment on the content, but we will study it if and when
it is published,” a Shell spokesman said.
The report alleges international oil
traders sometimes buy crude without any formal contracts, and the state oil
firm, the Nigerian National Petroleum Corporation, had short-changed the
Nigerian treasury billions over the last 10 years by selling crude oil and gas
to itself below market rates.
There was no suggestion that the oil
majors or traders had done anything illegal, but the report highlighted a lack
of transparency in their dealings in a nation rife with graft.
“It is a draft,” Alison-Madueke said.
“There will be some areas where the government … may have a slightly different
opinion … (and) will put its point of view to the committee.”
She said she expected the final report
to be with President Goodluck Jonathan within two weeks.
Ribadu’s probe was among several set
up following a week of nationwide strikes against a rise in fuel prices in
January, which morphed into a campaign against oil corruption.
Billions of dollars of revenue was
missing in unpaid debts from signature bonuses and royalties, the report found.
Nigeria LNG, a company jointly owned
by the NNPC, Shell, Total and Eni, had paid the country for gas at cut-down
prices before exporting it to international markets, the report said.
Total and Eni declined to comment
because they invest in but do not operate Nigeria LNG, the role played by
Shell.
“The estimated cumulative of the
deficit between value obtainable on the international market and what is
currently being obtained from NLNG, over the 10-year period, amounts to
approximately $29bn,” the report said.
It also said foreign oil firms had
outstanding debts.
Addax, now a unit of China’s
state-owned Sinopec, owes Nigeria $1.5bn in unpaid royalties, part of a $3bn
black hole of unpaid bonuses and royalties owed by oil firms.
Addax did not respond to requests for
comment, but the report noted it disputed owing the signature bonuses.
Shell owes the Federal Government
N137.57bn for gas sold from its Bonga deep offshore field, the report said,
while oil majors owed $58m between them for gas flaring penalties. They were
also not adhering to newer higher fines.
The probe also said Nigeria was the
only nation to sell all its crude through international oil traders rather than
directly to refineries, adding that such trades were often opaque.
It said some international oil traders
who were not “on the approved master list of customers” had been sold crude oil
“without a formal contract” so little could be obtained about the details of
these deals, which could be worth hundreds of millions of dollars.
“This logically will serve to reduce
margins obtainable on sale of crude oil,” the report said.
But Alison-Madueke disputed this,
saying there were no informal contracts and there was “an official tender put
out every year,” which could be seen by the public in newspapers.
The state oil firm gets an allocation
of 445,000 barrels per day of crude oil to refine locally, but it has been
selling itself this oil at cut-down prices, a practice which cost Nigeria $5bn
in potential revenue between 2002 and 2011, the report said.
“NNPC buys at international rates,”
Alison-Madueke retorted.
The report said the NNPC made N86.6bn
over the 10-year period by using overly generous exchange rates in its
declarations to the government. There was no sign of the money.
Among the report’s recommendations
were that parts of NNPC be reorganised or scrapped, an independent review of
the use of traders be set up and a transparency law be passed requiring oil
companies to disclose all payments made to Nigeria.
United States regulators put new rules
in place in August that will require US-listed oil and gas companies to
disclose payments they make to foreign governments like Nigeria.
Source:
Punch
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