Dirty deals in Nigeria oil industry; ...$183m (N28.73billion) oil fund missing – Nuhu Ribadu's report

Nigeria lost out on tens of billions of dollars in oil and gas revenues over the last decade from cut price deals struck between some multinational oil companies and government officials, a confidential report says.
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 (EFCC), Mallam Nuhu Ribadu, produced the 146-page study based on the Ministry of Petroleum Resources’ request. It covers the year 2002 to 2011.

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.

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.

However, 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.