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.
The Punch
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