The recent oil subsidy report has once again highlighted the oil sector in Nigeria as a corrupted entity. According to the Ribadu report a total of $183m (N28.73bn) in signature bonuses paid by oil companies to the federation is missing.
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 years between 2002 and 2012. The report said 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, according to the report, were awarded since the current minister, Mrs. Diezani Alison-Madueke, took up her position in 2010, according to the 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.
As it is, the Ribadu 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 reportedly 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 went further to say that 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 re-organised 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.
Meanwhile, the Nigeria Extractive Industries Transparency Initiative (NEITI) soon after the report was submitted, said that the submitted report by the Petroleum Revenue Special Task Force, headed by the former Chairman of the Economic and Financial Crimes Commission, Nuhu Ribadu, followed the trend of previous audits of the oil and gas sector in the country.
The Chairman, National Stakeholders Working Group of the NEITI BOARD, Ledum Mitee, in a statement said “as an agency statutorily set up to develop a framework for transparency and accountability in the management of revenues from Nigeria’s extractive industries, especially oil and gas, NEITI has legitimate interest in not only the report, but the processes, its findings and the outcome.”
NEITI said it has conducted “three different cycles of industry audits spanning the period 1999-2005 and 2006-2008 respectively. The Report of another round of comprehensive audit of the oil and gas sector for 2009- 2011 which began early in the year is expected to be concluded by December 2012.
“Each of the past NEITI audit Reports clearly identified financial, physical and process lapses, and revealed a loss of some 2.6 billion USD due to underpayments, under-assessments, poor judgment in the computations of volume of crude sales and other leakages only.
“From the past audits, NEITI reports equally disclosed that a whooping total sum of $9.8 billion (equivalent to ₦1.373 trillion at the current exchange rate) is outstanding recoverable fund due to the Federation Account from the companies. NEITI also openly expressed concern that there was no sufficient effort to recover the funds from the companies, by the affected relevant government agencies, even when the companies have not shown any resistance to pay.
“NEITI industry audits have also consistently identified and highlighted the problems within the sector, proposed solutions and ways to implement them, but implementations of these recommendations and remediation issues have remained a major challenge in spite of the efforts of NEITI under the Inter- Ministerial Task Team set up by the Federal Government for these purposes.
“NEITI notes that the reported findings of the Ribadu Committee are not surprising, rather it followed the trend of NEITI audits, given the prevailing poor institutional linkages, systematic leakages, poor legal framework, governance and process lapses which appear to characterize business ethics in the oil and gas industry in Nigeria over the years. The Ribadu Report has re-opened a compelling and urgent case for necessary follow- through actions on remedial issues already identified and recommended by the extant NEITI reports.
“While NEITI also considers the series of probes now on-going in the oil and gas sector as most welcome fundamental, steps towards actualizing the global principles and objectives of Extractive Industries Transparency Initiative, which Nigeria voluntarily subscribed to as a member since 2003, it feels however that had the remedial issues identified by the NEITI audit reports been dealt with or had NEITI the necessary enabling enforcement powers, some of the issues necessitating and identified by these probes would have since been dealt with.
Meanwhile, an outburst was made during the submission of the Report to President Jonathan Goodluck. But information available to this paper confirmed that Steve Oronsanye’s action may have been in tandem with Dr. Goodluck Jonathan as he is working in tandem with some members of the PTF Committee to influence the outcome of the committee’s findings and recommendations.
DESERT HERALD gathered that the appointment of Oronsanye into the committee as he (Oronsanye) has been known as one man that does the dirty job always, just as he did during the Obasanjo-led crude oil cabal – and that the Jonathan administration tapped on his services to assure the PTF committee is sedated to an extent.
A Presidency source told this medium that upon the completion of the report, envoys from the Presidency and the Federal Ministry of Petroleum Resources approached the committee seeking to know the content of the committee report, an approach which Nuhu Ribadu was said to have reacted in the negative – and then uncomfortable with releasing the report directly to the Presidency without having the public know its contents.
Even as this paper also said that the report had been ready for submission to the Presidency through the Federal Minister of Petroleum Resources, the Minister was said to have sat on the report with no intentions of acting on it. This therefore prompted Nuhu Ribadu to leak the report to the media – to pressurize the presidency into action. And as anticipated, the presidency acted as expected to demand that the report be presented to the President within five days – of its leak to the media.
As gathered as soon as the report was made open to the public, Federal Minister of Petroleum Resources – who had sat on the report for several weeks – was quick to add that the report needs re-modification and vetting before it can be accepted by the Presidency. This she said publicly while sources close to her revealed that she was “highly uncomfortable” with the recommendations of the report and that she was determined to “rubbish” it.
Similarly, a very close source who confided to this paper, said that the escapades of Oronsanye didn’t start today, as he has been in the game of shoddy deals. According to the source, he told this medium that Oronsanye was brought into government by former finance minister, Anthony Ani, in 1995 as a special assistant on salary grade level 12 – of which an unrealistic salary package prepared for Oronsanye by Ani was rejected by General Sani Abacha.
This paper gathered that Oronsanye, who is a forensic accountant, was made Director in the Federal Ministry of Finance before Ani was removed from the Ministry. His escapades, this paper learnt, even began in the Finance Ministry as during the decongestion of the Apapa Ports, he was made the Chairman of the Committee and out of the eight containers to be decongested, Oransanye, this paper gathered, sold four and put his money in private pockets.
However, when Andy Uba became the SA on Domestic Affairs to former President Obasanjo, he was made an SSA and later a Principal Secretary to the President, all thanks to Andy Uba. However, he began his escapades in the Villa as he was doing a lot of shoddy deals. According to the source, Oronsanye accosted one of the Directors in the Villa then to process a file for him for a refund of money which was never spent, the Money was in the tune of one Billion Naira, a request which the Director rejected after about four attempts and when it became obvious that he could not succeed the plan for the deployment of the Director to Ministry of Defence.
The source in the Villa alleged that Oronsanye did a lot of shoddy deals in the Villa. For instance, he was alleged to have been doing secret deals with Julius Berger Nigeria which does maintenance job of the Villa. He was always running parallel accounts, which he sent to Julius Berger office abroad in his act of laundering monies. Meanwhile, another way he was using to make money is in the area of imprest that is being used to run the villa, as he was alleged to have doubled the amount of money required as impress which is normally in dollars and pounds sterling and sell same in the Bureau de Change market.
The source recalled that he was caught in Paris France, after laundering three hundred and fifty million dollars, during the Obasanjo daughter’s wedding who married a white man, and when he was asked by security officials in France what he was doing with such a large sum of money, he claimed it was for his boss whom he refused to mention. He was in detention for two weeks, and Obasanjo sought the efforts of the NSA then, Aliyu Gusau, and he facilitated his release. The agreement was that the Nigerian government will release a French Nationale who is being held in the NIA underground cell in Abuja and the French in turn also released him, serving as an exchange for the prisoner in Nigeria.
According to the source, the money was not returned and also he never came to Nigeria until after a month as he came back through Seoul in South Korea. When the list of new Permanent Secretaries was sent to Obasanjo for approval, the former president inserted Oronsanye’s name in biro.
Later, President Umaru Yar’adua made Oronsanye the Head of the Civil Service of the Federation.
While in government, Oronsanye was found to have served the Obasanjo cabal with unfettered loyalty. According to the source, he represented the interests of the Obasanjo-led machinery. “He was utilized repeatedly as the eye and the spoiler for the Obasanjo cabal”. The source added that the Jonathan presidency fits neatly into the Obasanjo cabal – of which Oronsanye has continued to serve to represent the same interest – in a manner similar to his absent contribution to the PTF committee.
One of the many committees which Mr. President had appointed Oronsanye as an absent member was the Adamu Fika-led Presidential Committee on the Review of the Reform Processes in the Nigerian Public Service. Mr. Oronsanye interestingly failed to attend any of the sessions of the committee – with no reasons given for his absence. And rather than sanction Oronsanye for absence, the Jonathan administration took out the most important term of reference of the Fika committee – and appointed Oronsanye to head the Technical Committee to restructure and Rationalize Federal Government Parastatals and Agencies for Optimal Management of National Resources. The committee’s outcome and findings were reported to resemble a “paid operation” by involved experts.
Also, recent information made available to our correspondent indicates that Oronsanye may have reaped great rewards for his role as the watch man for the Obasanjo/Jonathan oil cabal. Ongoing investigation suggests Oronsanye owns extensive and prime real estate in Abuja valued in excess of N8.5billion, as he is also alleged to have properties in USA and London.
Furthermore, another person that was brought to limelight again was the Petroleum Minister, as an investigative reporting online, recently published other escapades of the Minister.
Nigeria’s controversial oil minister, Diezani Alison-Madueke’s, management style, which is disrupting the governance structure of the Nigerian National Petroleum Corporation, NNPC, is causing concern in the state oil giant and the industry, said a joint investigation by the International Centre for Investigative Reporting. The powerful oil minister has rendered some administrative structures and personnel, including the position of permanent secretary, redundant with her penchant for using personal assistants in her office to conduct high level official duties.
Mrs. Alison – Madueke rules the rich oil ministry like a personal estate, with lax work ethics, ignoring laid down rules and procedures and bypassing hierarchical order to achieve her goals. In the process, staff of the corporation alleged that the minister has compromised professionalism and undermined discipline. One of the most worrisome of the minister’s disruptions in the oil ministry is her style of working from home. Mrs Alison – Madueke has developed a knack for working mainly from her official residence in Asokoro District in Abuja, visiting the office only very infrequently.
Even a perfunctory observation of activities at her residence shows that she runs things from there as the ceaseless activity and security presence show.
It was gathered that the minister goes to her office at the NNPC headquarters in the Central Business District in Abuja mainly on Wednesdays, after the Federal Executive Council, FEC, meeting or when she has to meet foreign dignitaries or important Nigerian oil industry executives.
Concerned sources confided that because of her ‘operate from home policy’, she forces a lot of ministry – related meetings to be held in her house, thus disrupting official schedules of key personnel. She holds such meetings up to three or four times a week in her residence, usually making key personnel, including the group managing director of the NNPC, and even whole departments of the corporation, to relocate to her house. Many of the senior staff of the oil corporation who are forced to attend such meetings are fed up with the situation but dare not complain about it.
Apart from the administrative toll and man hour lost to having to move the corporation’s operations to her house, even more burdensome is the financial cost of the minister’s decision to operate from home. Each time she holds her usually big meetings in the house, the minister gets the catering department of the Transcorp Hilton Hotel, Abuja to serve a buffet.
Our enquiries indicate that the hotel does not engage in such outdoor catering services for a client with less than 50 guests at a time. With a total of three or four meetings a week, by our calculations, the minister spends between N2.5 million to N4million on food and drinks weekly on official meetings held at her residence.
In a month, the Petroleum Minister spends between N10 million to N16 million entertaining herself. And in a year, Mrs Alison – Madueke blows between N120 million and N192 million on indelicate culinary extravagance. The bills are entirely picked up by the NNPC, meaning that the burden for such mindless spending is borne by Nigerian tax payers.
Another worrisome aspect of the minister’s style is her utter disregard to rules, guidelines and official protocols and procedures, bothering on highhandedness. Nothing more aptly explains this than her employment of Eric Ufo as a senior special adviser/consultant. Mr. Ufo is the oil minister major domo, a veritable man Friday who does all kinds of odd jobs for his principal. With no experience in the oil and gas industry, his employment has all the ingredients of Diezani-Madueke’s disdain for administrative rules and protocols. The minister initially signed on Mr. Ufo as special adviser.
However, out of the blues, she changed his engagement and rather engaged the services of the young man’s company to offer consultancy services for a fee of N37 million annually. This bill was hung on the NNPC, though Mr. Ufo in practice, works for and ought to be paid by the petroleum ministry.
As if the controversies surrounding his employment were not enough, Mr. Ufo has become a tin god in the oil corporation, calling the shots and undermining the positions of senior management staff, including the group managing director to whom he routinely issues directives. Information by sources inside the NNPC show that Mr. Ufo, bandying the minister’s name around, tried his executive high handedness with former group managing director of the corporation, Austen Oniwon, who rebuffed him. The former GMD is said to have seriously warned the special adviser to the minister never to write him directly but through proper channels, which is to go through the minister’s office.
Using his closeness with the minister, Mr. Ufo subsequently caused some tensions between the oil giant’s chief executive and the oil minister which persisted until the former was replaced in June. However, the new GMD of the NNPC is said to be less assertive, thus allowing Mr. Ufo to have more than an elbow room to interfere in the daily running of the corporation. A classic example of the enormity of the power Mr. Ufo now wields on account of being “madam’s errand boy”, is his overriding of the routine directive to transfer an employee of the NNPC from one department to the other. The employee, Uzoh Ejidoh, had been sanctioned for some misdemeanor and transferred from the public affairs department to the human resources department but Mr. Ufo overrode the transfer directive and instructed that she should instead be transferred to his office, a directive that was immediately carried out.
Ms. Ejidoh, reports say, was employed in 2005 into the public affairs department of NNPC on grade SS 3 having claimed to have had some experience. It was gathered that NNPC employs two categories of staff at this level – fresh from school, for new graduates who are placed on grade SS6 and experienced higher for persons with at least five to 10 years’ experience that come in on level SS3. It is said that it takes about 10 to 15 years to move from SS6 to SS3. A few years into her employment, Ms. Ejidoh wrote a petition to the corporation’s human resources department complaining that she was not properly graded. This, she did, after some other persons with longer years of experience had been employed and placed on SS 2, higher than hers.’
Investigations into her work history however revealed to the management that having graduated only a couple of years before her employment, she did not possess the experience she claimed before she was hired. Rather than elevate her above those she complained had been wrongfully promoted above her, she was demoted to SS 5 and redeployed from public affairs to human resources department. However, former head of the public affairs department, Livi Ajuonuma, who died in the Dana air crash in June, refused to release her. So after Mr. Ajuonuma died, Ms. Ejidoh ingratiated herself with Mr. Ufo, the minister’s trusted and powerful aide, who got her transferred to the minister’s office to work under him.
To affect Ms. Ejidoh’s transfer, Mr. Ufo actually brazenly and against all rules of hierarchy and protocol, wrote a memo to the GMD of NNPC requesting him to redeploy her to the minister’s office where she now works with and reports to the special adviser. Many senior management staff of the corporation are angry at the manner Mr. Ufo goes about dropping the minister’s name to get favours but they are scared to complain because of the young man’s closeness to his boss. Another evidence of Mrs. Alison-Madueke’s high handedness and absolute disregard for rules is her employment of domestic staff on the bill of the NNPC. The minister has a retinue of domestic staff who work in her residence. Ordinarily, with her position as minister, she is allowed about two domestic workers in her residence. But Mrs. Alison-Madueke has several domestic staff but rather than pay them from her pocket, she found a way of including them on the payroll of the NNPC.
Apart from this, the flamboyant minister also has a penchant for travelling abroad with her retinue of personal aides, including several domestic staff. When she goes on her frequent foreign trips, the NNPC is made to pay for the flight tickets and accommodation of these domestic staff. What is more, she is said to also make the corporation pay estacode to the domestic servants each time she travels abroad.