Economy

Nigeria Could Lose $6bn to Malabu Scam – Global Witness

Published

5 years ago

November 27, 2018

Nigeria Could Lose $6bn to Malabu Scam – Global Witness

A court in Milan is considering charges of corruption against Eni and Shell over the purchase in 2011 of Nigeria’s Oil Prospecting Licence 245 that led to Nigeria losing an estimated $6bn.

A global anti-corruption and accountability watchdog group, Global Witness, has calculated that the OPL 245 deal deprived Nigeria of double its annual education and healthcare budget, the British Broadcasting Corporation reports on Monday.

The group has spent years investigating the deal, which gave Eni and Shell the rights to explore OPL 245, an offshore oil field in the Niger Delta.

It has commissioned new analysis of the way the contract was altered in favour of the energy companies and concluded Nigeria’s losses over the lifetime of the project could amount to $5.86bn, compared to terms in place before 2011.

The analysis was carried out by Resources for Development Consulting on behalf of Global Witness, as well as three non-governmental organisations, namely HEDA, RE:Common and The Corner. The estimated losses were calculated using an oil price of $70 a barrel as a basis.

Eni has criticised the way it was calculated because it ignored the possibility that Nigeria had the right to revise the deal to claim a 50 per cent share of the production revenues, according to the BBC report.

Eni and Shell were accused of knowing the money they paid to Nigeria would be used for bribes.

The Italian and Anglo-Dutch energy giants denied any wrongdoing.

The unfolding scandal, which is being played out in an Italian court, has involved former MI6 officers, the Federal Bureau of Investigation, a former President of Nigeria, as well as current and former senior executives at the two oil companies.

The former Nigerian oil minister, Dan Etete, was found guilty by a court in France of money laundering and it emerged he used illicit funds to buy a speed boat and a chateau.

Campaigners said the deal should be cancelled.

“We discovered that Shell had constructed a deal that cut Nigeria out of their share of profit oil from the block,” Ava Lee, a campaigner at Global Witness, told the BBC’s World Business Report.

“This amount of money would be enough to educate six million teachers in Nigeria. It really can’t be underestimated just how big a deal this could be for a country that right now has the highest rates of extreme poverty in the world.”

The court in Milan is weighing evidence of how Etete awarded ownership of OPL 245, which is estimated to contain nine billion barrels of oil, to Malabu, a company he secretly controlled.

He is accused of paying bribes to others in the government, such as former President Goodluck Jonathan, to ensure that the process went smoothly.

Up Next

Nigeria Has Lost its Most Valued Oil Buyers – DPR

Don't Miss

FG, Volkswagen Begin Talks on Automobile Hub

Samed Olukoya

Is the CEO/Founder of Investors King Limited. A proven foreign exchange research analyst and a published author on Yahoo Finance, Nasdaq, Entrepreneur.com, Investorplace, and many more. He has over two decades of experience in global financial markets.

Comments

Economy

Inflation and Forex Mismanagement Drive Petrol Truck Prices from N7M to N25M

Published

11 hours ago

December 8, 2023

Investors King

The Chairman of the Independent Petroleum Marketers Association of Nigeria in the Satellite Depot branch, Akin Akinrinade, has raised an alarm over the rising cost of petrol trucks in Nigeria.

According to Akinrinade, the cost of a petrol truck has surged from N7 million in May to an astonishing N25 million at present, attributed to inflation induced by poorly managed foreign exchange rates.

Akinrinade pointed out that the forex mismanagement has significantly impacted the landing cost of premium motor spirit (PMS), commonly known as petrol, consequently leading to a surge in pump prices.

The unstable business environment, coupled with the astronomical rise in expenses, has created challenges for marketers in the downstream oil sector.

Mele Kyari, the Group Chief Executive Officer of the Nigerian National Petroleum Company Limited (NNPCL), highlighted in October 2023 that foreign exchange challenges have hindered private companies from importing petroleum products.

As a result, the NNPCL has become the exclusive importer of petrol.

The decision to limit private entities from importing fuel comes after President Bola Tinubu’s initiatives aimed at deregulating the fuel market.

Initially, the plan was to allow private companies to import fuel starting June 2023, aligning with efforts to balance the market after removing petrol subsidies.

The ripple effects of the soaring petrol costs are already evident, with commercial transporters increasing fares, and private car owners seeking fuel-saving alternatives.

As Christmas approaches, the surge in demand for interstate travel is expected to further elevate costs, posing financial challenges for many Nigerians amidst stagnant income levels.

Economy

Nigeria’s Presidential CNG Initiative Allocates N100bn for CNG Buses and EV Adoption

Published

2 days ago

December 7, 2023

Investors King

The Presidential Compressed Natural Gas (CNG) Initiative has allocated N100 billion to expedite the deployment of CNG buses nationwide, according to a statement released on Wednesday.

The initiative, designed to catalyze an Auto-gas and Electric Vehicle (EV) revolution in mass transit and transportation, aims to enhance sustainability and cost-effectiveness.

The statement revealed that the fund would be instrumental in supporting the adoption of auto-gas and electric vehicles, signaling a commitment to a more sustainable and economical future in the transportation sector.

The Presidential CNG Initiative plans to leverage over 11,500 CNG and electric-fueled vehicles, along with the deployment of 55,000 conversion kits.

This strategic approach is intended to reduce transportation costs for Nigerians and mitigate the challenges posed by the rising cost of living.

Under the Renewed Hope Agenda, the Presidential CNG Initiative is dedicated to realizing the President’s vision, guided by its steering committee led by FIRS Chairman Zacch Adedeji.

The statement highlighted recent achievements, including strategic technical partnerships and the ongoing commissioning of CNG Conversion centers in key states such as Lagos, Abuja, Kaduna, Ogun, and Rivers.

Several more centers are slated for commissioning in the coming weeks, reflecting the initiative’s momentum and commitment to achieving its objectives.

Economy

Nigeria’s Power Transformation: 53 Projects Worth N122bn on Track for May 2024 Completion

Published

2 days ago

December 7, 2023

Investors King

The Central Bank of Nigeria (CBN), in collaboration with the Transmission Company of Nigeria (TCN) and power distribution companies, is set to complete 53 power projects by May next year.

Valued at N122 billion, these projects aim to add over 1,000 megawatts to TCN’s wheeling capacity.

During a recent tour of three ongoing projects in Lagos, TCN’s Programme Coordinator, Mathew Ajibade, assured that the projects were not abandoned, refuting speculations.

He confirmed that work is progressing smoothly and is expected to be completed by May 2024, as initially planned.

Assistant Director/Head of Infrastructure Finance Office at the CBN, Tumba Tijani, highlighted the CBN’s support for the power sector, revealing that the bank released a loan at a 9% interest rate in August last year for the projects.

The funding, part of the Nigeria Electricity Market Stabilisation Facility-3, amounts to N122,289,344 and aims to address transmission/distribution bottlenecks, enhance supply to end-users, and unlock unutilized generation capacity.

Tijani disclosed that N85.43 billion has been disbursed into the Advance Payment Guarantee account of the 53 contractors responsible for executing the projects.

The comprehensive project list includes the delivery of power transformers, re-conductoring existing transmission lines, upgrading existing substations, and constructing 33KV line bays.

The initiative reflects a concerted effort to enhance Nigeria’s power infrastructure and meet growing energy demands.