Oil sector scandal: Proceeds from stolen 1.492billion barrels of crude oil to be recovered

Oil sector scandal: Proceeds from stolen 1.492billion barrels of crude oil to be recovered 

…Reps conclude probe, may soon table report

…727,460 metric tons of gas allegedly unaccounted for (Cost $461million, allegedly traced to 7 countries)

…Cost of Crude Allegedly Traced: US, $12billion; China, $3billion; Norway, $839, 522,600

By Emman Ovuakporie

The idiocy of the Nigerian state is magnified by the fact that whereas Nigeria has crude oil  worth over $15billion stolen from its shores, at a time when the selfsame country is  chasing after loans that represent just a fraction of what its citizens in collaboration with foreigners have  stolen from it.

Therefore, the spectre of gloom that continues to stare Nigerians in the face as a result of the present economic situation may not be about to end unless the Federal Government of Nigeria ensures that  the move to recoup  proceeds from stolen crude, get some traction.   The story is as  stupefying as it is unbelievable.

An estimated 1,492,000,000 (One billion, four hundred and ninety million barrels of crude oil) was carted away between 2011 and 2014.

The cost is put at between $15b and $17b.   Moves are being made to recover the monies.   Of the 51 countries alleged to be destinations of the stolen crude, investigations on 41   have been concluded.

Painfully, however, the slow pace of the investigation has not been unconnected to the dysfunctional institutions in the country which made extraction of information that would have aided the tracking of the products impossible.

DISTURBED by the magnitude of crude oil and gas   stolen from Nigeria between 2011-2014, estimated at over 17billion dollars, members of the House of Representatives, office of the Attorney General to the Federation and the presidency have traced locations of Nigeria’s stolen crude oil across the globe.

Latest updates indicate that 51 countries are alleged to be involved.

According to sources, already, investigations have been concluded in 41 countries.

As at the time of going to press, the list of the countries was still being kept under wraps for diplomatic reasons.

Sunday Vanguard learnt that the Presidency, United States’ Justice Department, and Office of the Attorney General of the Federation, OAGF,   have intensified efforts towards getting the funds back.

Yakubu Dogara

Information available suggests that the Nigerian government has been in touch with the US Justice Department, the initial investigators, Loumos Group, which is a Texas-based firm, and Hon Ehiozuwa Johnson Agbonayinma, PDP, Ikpoba Oha/Egor Federal Constituency, in Edo State, on how to get a substantial part of the funds returned.

In the forefront of this campaign to get a refund and speed up the prosecution of the multi-national companies involved are Hon Agbonayinma, and  Barrister Juliet Ibekaku-Nwagwu, who currently serves as  Special Adviser to President Muhammadu Buhari on Justice Reform/National Co-ordinator Open Government Partnership.

Also, Loumos Group engaged the services of three lawyers to help pursue the matter in the US as all efforts of the Attorney General of the Federation and Minister of Justice, Abubakar Malami, to prosecute the matter here in Nigeria, continue to hit a brick wall.

For instance, the General Counsel to Loumos Group, Jerome Stanley, disclosed that all attempts, through institutions in Nigeria, to extract information that would aid the tracking of the crude oil that left Nigeria proved abortive.

In fact, after spending time in Nigeria without achieving any meaningful results, the team of lawyers from the United States of America, according to Stanley, had to  return to Houston, Texas, in the US. (Read attached interview on the next steps to be taken).

Last year, specifically on Friday, September 23, the House of Representatives inaugurated an ad-hoc Committee to carry out investigative hearings on the allegations as presented by Hon Agbonayinma in a motion.

The committee, headed by Hon Abdulrazaq Namdas, APC, Adamawa, concluded its investigations but has not laid its report on the floor of the House.

Once the committee commenced the investigative hearing, it became difficult to get the critical stakeholders who deliberately refused to appear or even submit vital documents until the lawmakers threatened to issue a Bench warrant.

Motion that set off investigations

Agbonayinma told his colleagues that former President Goodluck Jonathan contracted an auditing firm to probe what went wrong and he gave a brief synopsis of the report.

He gave the breakdown that the   Nigeria National Petroleum Corporation, NNPC, and the Nigerian Maritime Administration and Safety Agency, NIMASA, and other agencies were indicted in the report.

The company was contracted in 2013 by the administration of President Jonathan to

proffer solutions to the challenges of crude oil theft.

Agbonayinma, in the motion, recalled that Molecular Power System was engaged to provide technical data (records of crude oil and liquefied natural gas lifting in Nigeria as obtained from the NNPC, and landing certificates at global destinations) to verify possibilities of non declaration to the federal government by multinational companies.

“The data gathering of shipment to the USA for the period 2011 to December 2014 through critical NNPC data and the Central Bank of Nigeria, CBN, pre-shipment inspection report shows undeclared crude oil shortfalls of 57,830,000 MT of Nigerian crude oil, translating to well over $12 billion to the USA, also over $3billion to China, and $839,522,600 to Norway,” he said.   These were conclusively ascertained by buyers’ bill of lading, arrival dates, destination ports, quantity of crude oil and other documented information, Agbonayinma said.

This is scandalous.

The lawmaker further noted that the data gathered showed a liquefied natural gas shortfall of 727,460 metric tonnes, estimated at over $461 million, from shipments to seven countries. The revenue loss, Agbonayinma said, was traced to cargoes at each destination port of entry, and have been established as undeclared cargo.

He added that the tracing was found in 51 countries where Nigerian crude oil has been exported, with the US being the largest receiver of crude oil.

The report from the US and that of other countries, were made available to the former President, the office of the Attorney General of the Federation and the Economic and Financial Crimes Commission, EFCC, he said.

“The machines that monitor loading into the vessels were bought, owned, calibrated  and operated by the International Oil Companies (IOCs) without monitoring”.

After listening to him, the Speaker, Yakubu Dogara, quickly set up an adhoc committee to dig deeper into Agbonayinma’s assertions.

When the committee commenced its work, more embarrassing revelations came to light.

Committee’s work

The members,   while cross examining Rabiu Bello, NNPC’s Chief Operating Officer (COO), he admitted before the panelists that there were discripancies in the documents before the Adhoc Committee.

In  the process, the committee discovered that within four years, from the documents submitted by the stakeholders, about $15billion unremitted oil and gas revenue   could not be adequately explained.

Abubakar Malami (SAN).

The committee also discovered that the alleged missing funds were contained in the two separate documents submitted by the NNPC.

Also in   his presentation, Jack Ukitetu, CBN Director who represented the CBN Governor, Mr Godwin Emefiele, explained that the Accountant General of the Federation approves and determines the money that goes into the Excess Crude Account.

Ukitetu, who explained that before 2006, the CBN collected the money on behalf of government’s agencies and remitted same into the Federal Reserve Account in New York, and charged 0.25 percent, however, noted that after 2006, the oil companies pay directly what is due to the government.

On commissions being collected by the apex bank, the CBN representative told the lawmakers that the CBN collects 0.25 percent via forex allocation and does not charge FG one kobo as its deductions are made from central sales.

He explained that the levels of sales are the buying, central and selling rates, but CBN does its deductions at central sales level.

The CBN representative also disclosed that the crude oil account is maintained by JP Morgan, and admitted that in making the transfers, the money could be misdirected to another account by the financial institutions.

He added that the apex bank has no statutory power of oversight to demand for details of the transactions made by NNPC.

The committee at this point, asked him to bring the total commissions deducted by the apex bank from 2011-2014 within the next one week.   He was also instructed to bring along all letters of credit issued by the CBN within the same period.

Waziri Adio, Executive Secretary of Nigerian Extractive Industry Transparency Initiative, NEITI, in his submission, accused NNPC and CBN of misleading the Adhoc Committee but pleaded to withdraw the earlier documents submitted.

He however pledged to submit “more damaging documents” on the alleged crude oil theft to the Adhoc Committee, that will help in unearthing the unremitted revenue which accrued from oil and gas sales but which were not remitted.

Namdas had earlier threatened that the Ad-hoc Committee will not hesitate to submit its report to the House without the inputs of major Ministries, Departments and Agencies (MDAs) which fail to honour the invitation of the committee.

To this end, he mandated the apex bank and NNPC to submit the audited report of the oil and gas account showing the remitted funds into the Federation Account between 2011 and 2014.

The Corporation was also mandated to submit Bill of Laden relating to the 974,721 barrels of crude oil lifted on 20th October 2011; 961,963 barrels lifted on the 10th October 2011; 974,935 barrels of crude oil lifted on the 9th July 2011 as well as 974,953 barrels of crude oil lifted on the 18th July 2011 but were not declared.

The lawmakers also requested for report of the reconciliation conducted by NNPC and Federal Inland Revenue Service, FIRS, as well as the list of oil off-takers for 2013 and 2014.