By CHIMA TITUS NWOKOJI
Corruption in the oil and gas sector of the Nigerian economy has engendered multiple inconclusive probes and reports that threaten multi-billion dollar Foreign Direct Investment (FDI) expected to flow into the oil and gas sectors of the Nigerian economy. Daily Sun checks revealed that over the past one year, several investigations have been commissioned to probe the crisis in the industry without meaningful conclusion.
These include the Aig-Imoukhuede-led committee investigation and report on subsidy; the Economic and Finacial Crimes Commission (EFCC) investigation into a multi-billion dollar scam, which cost the treasury $6.8 billion over three years; the House of Representatives investigations into allegations of a shady oil deal over the sale of $1.1 billion oil block OPL 245; Senate probe of N175 billion Malabu oil bloc deal, in which some top government officials were indicted; the Ledum Mitee-led Extractive Industries Transparency Initiative (NEITI) probe into the custody and management of extractive resources revenue, which discovered about $9.80 billion, representing outstanding recoverable funds due to the federation account from oil and gas companies operating in the country.
The most recent report of such investigations is the much talked about report of the Petroleum Revenue Special Task Force headed by a former chairman of the EFCC, Mallam Nuhu Ribadu, which risks been dumped for lack of data integrity. “The crisis and the regrettable situation are capable of scaring away any foreign investor, who is not so conversant with the operating environment in Nigeria,” said a source. Regional head of research Africa, Standard Chartered Bank London, Ms. Razia Khan, said oversight into Nigeria’s actual oil earnings is still something of a mystery, given the current framework. According to her, entrenchment of a regime of transparency in the sector will boost foreign direct investment and improve Nigeria’s rating.
“Although this does not seem to have been taken into account in existing draft legislation of the Petroleum Industry Bill (PIB), the hope is that this important matter, which could put Nigeria in sight of a much higher rating, will be addressed when the PIB is eventually passed,” said the economist. It has been estimated that the industry will attract about $100 billion in the upstream and about $10.2 billion in the downstream sectors of the oil industry. Also, the recent pronouncement by the Minister of Trade and Investment, Olusegun Aganga, about a proposed foreign direct investment of $4.5 billion in six modular refineries reinforces the case for conclusion of the investigations and implementation of recommendations of submitted ones.
A new survey by business advisory firm, Ernst & Young said 80 per cent of the over $116 billion (N18.5 trillion) FDI in the last decade came from the oil and gas sector. “Nigeria’s substantial oil reserves will continue to attract funds over the medium term, and we expect the bulk of FDI to be concentrated here.” At the official launch of the report, Regional Managing Partner for West Africa, Mr. Henry Egbiki told the media that FDI inflows to Nigeria may hit the average of about $23 billion (N3.6 trillion) yearly, with approximately 95, 000 jobs to be created as a result. But analysts are worried that these promising opportunities may be frittered away as almost all reports seem to be in deadlock, with corruption still rife in the sector.
The fears of industry sources were corroborated by a recent letter written by Aganga to the presidency over fraud discovery. In the letter, entitled ‘Investigation Into the Discovery of a Forged Crude Oil and Gas Export Clearance Permit No: CO/28/VOL VIII/09’, purportedly issued by the Federal Ministry of Trade and Investment, to NNPC, for shipment of 24 million barrels of crude oil and gas in the third quarter (July to September) 2012, Aganga wrote: “May I humbly inform Mr. President that on Thursday, 4th October 2012, my office was alerted of the existence of an export clearance permit No. CO/28/VOL III/09 purportedly issued by my office to Nigerian National Petroleum Corporation (NNPC) for the export of crude oil and gas from Nigeria for the period covering July 1, 2012 to September 30, 2012.
“On a closer examination, it was discovered that one of the permits was not, in fact, issued by my office and may have been forged as it did not bear the security features that we had built into the original permit forms to prevent such forgeries. Had these security features not been in place it would have been difficult to detect the forgery’” he said. Nigerians who are outraged at the monumental fraud in the oil and gas industry as revealed by the Nuhu Ribadu report have stressed the urgency of taking some measures to check the alleged corruption in the sector. The nation’s business community called for a decisive action on the part of the Federal Government on the issue while the Chairman of the National Stakeholders Working Group (NSWG) of the Nigeria Extractive Industries Transparency Initiative (NEITI), Ledum Mitte, said that the revelations contained in the Ribadu’s report may not have been necessary if the successive findings of the NEITI had been implemented. Daily Sun checks reveal that the Presidency was not satisfied with the committee for failure to carry out a critical part of its assignment of data reconciliation and verification, thereby making its report defective and unenforceable. Presidential assistant on public affairs Doyin Okupe said the report was “jumbled and fumbled” as the committee itself placed an “obvious disclaimer” by saying it could not verify some of the data. It follows that the report suffers from credibility question, Fraud, politics and other infractions that characterize Nigeria’s critical oil and gas industry.
Okupe late last week said Ribadu was encouraging negativism and declared that the committee did not complete its assignment, challenging him to be courageous enough with names that made overtures to make him to compromise the report which he resisted. Experts believed there was little or nothing new from the leaked copy, just as there are no remarkable differences between the report and contents of the KPMG, Imokhuade , Farouk and the senate joint committees reports which debate and implementation remained hazy.