Nigeria lost N28.73 billion in oil cut prices- Ribadu committee Reviewed by Momizat on . 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 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 Rating:
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Nigeria lost N28.73 billion in oil cut prices- Ribadu committee

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.

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.

 

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  • http://profile.yahoo.com/KCFCIIC2ZIKS5Y5LPUK7JMK7TE Plasma

    I am just confused.
    If we say the President of Nigeria and/or the Petroleum Minister can give out oil licenses at their discretion without using bids,
    why do we want to know or rather query whom and why they gave the licenses to,
    why do we want to know how many thousand barrels of crude was sold to them,
    why do we want to know how much they bought the crude and how much they short changed us,
    why do we want to know who has paid their royalty and what happened to the royalty,( let me guess, they are paying the person/people who gave them the license to trade)
    why do we want to know those who are still owing the government?
    After all they said it is not illegal.
    Is there nothing good to report from Nigeria? Is there no Governor commissioning pipe borne water in the local community, or celebrating six months of uninterrupted power supply in his state or commissioning a road or bridge or school or something built to International standards. Must we always be reading this person stole billions of dollars, that person stole billions of dollars.

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