Saturday, 9 March 2013

CORRUPTION IN NIGERIA'S OIL SECTOR EXPOSED


Revealed: Northerners own 80% of oil blocks - Nigeria we hail thee!
According to reports coming from Abuja the supporters of the Petroleum Industry Bill (PIB) pushed their case further yesterday at the Senate, with startling facts on the sector.  Senator Ita Enang from Akwa Ibom North East described the opposition to the proposed 10% host community fund by mostly northern senators as misplaced or misguided.
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, apparently seemed to have been shocked by Enang’s revelation, said the Akwa Ibom lawmaker should not be distracted because some senators were grumbling as 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 Dantataâ - 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 License.  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 Yarâ Adua and Ado Bayero. It has substantial stakes in Nigeria oil exploration industry both in Nigeria and Sao Tome and Principe.
He said that Mike Adenugaâ’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.
And a negligible number of blocks and/or nothing for the Southsouth, Niger Delta oil producing areas. He said yet some of the senators are questioning the rationale behind awarding just 13 per cent o the host community.  The block owners are producing the entire 100 per cent, they give some to the Federation Account and they give only 13 per cent of what you declared to the host community and, of course, it is whatever you declared that you have produced. 
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 they are owners of more than 80% of the nations oil blocks then it is no surprise that there is so much opposition that even the people who suffer the effect of the oil production should not be given host communities fund.  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.
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 licenses 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 to the minister of petroleum in the bill should be reconsidered so we don’t end up giving too much power to the minister. The lawmaker, who insisted that the bill should be fine-tuned, 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 used an adage which 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 in the case of Nigeria and our oil. 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.
According 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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