Thursday, October 25, 2012

Ribadu's Panel Uncovers 29Billion Missing Oil Fund

Federal Government committee headed by former anti-corruption agency chief Nuhu Ribadu has unearthed a cesspool of fraud and corruption in the oil industry. About N29 billion earned in 10 years by oil giant Nigeria National Petroleum Corporation (NNPC) is missing, according to the committee’s report. Billions of dollars of revenue is missing in unpaid debt from signature bonuses and royalties, the report said. It recommended, among others, that the NNPC be partially reorganised or scrapped, according to Reuters, quoting part of the 141-page study, carried out at the behest of the Ministry of Petroleum Resources. The 21-member committee was set up as Revenue Task Force by President Goodluck Jonathan among adhoc bodies set up by the government following the removal of subsidy on petroleum products in January which was greeted by protests. The report provides new details on Nigeria’s “long history” of corruption in the oil sector. Mrs. Alison-Madueke told Reuters on Tuesday 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 labeled “Final Report”. The report concluded that oil majors Shell, Total and Eni made bumper profits from cut-price gas, while Nigerian 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 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. “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 expects the final report to be with President Goodluck Jonathan within two weeks. “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 $29 billion,” the report said. It also said foreign oil firms had outstanding debts. Addax, now a unit of China’s state-owned Sinopec, owes Nigeria $1.5 billion in unpaid royalties, part of a $3 billion black hole of unpaid bonuses and royalties owed by oil firms.

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