Nigeria lost over N6.4 trillion to corruption-ridden NNPC oil sales – NRGI Report

NNPC Towers
NNPC Towers

Nigeria would have been buoyant enough to finance its 2015 budget of N4.36 trillion and still pay off its external debts of N2.03 trillion if it had not lost more than that amount — $32 billion (N6.4 trillion at N200/$1) — to massive corruption that characterized oil sales by the Nigerian National Petroleum Corporation during the last administration, a new report has said.

An independent investigative analysis by the Natural Resource Governance Institute (NRGI) has revealed that over $32 billion oil revenue was lost to NNPC’s mismanagement of Domestic Crude Allocation (DCA), opaque revenue retention practices and corruption-ridden oil-for-product swap agreements.

The report offered a deep, independent analysis of how NNPC sells its oil, and found that the national oil company’s discretionary spending from domestic crude oil sale revenues has skyrocketed, exceeding $6 billion a year for the 2011 to 2013 period (i.e. over $18 billion in three years).

Also, the in-depth research found no evidence that NNPC, between 2004 and 2014, forwarded to the treasury any revenues from sales of Okono crude with volumes of over 100 million barrels, with an estimated value of $12.3 billion.

In other words, the corporation has provided no public accounting of how it used a decade’s worth of revenues from an entire stream of the country’s oil production.

In the same manner, losses from three provisions in a single, offshore processing agreements (OPAs) contract, estimated at $381 million in one year (or over $1.9 billion between 2010 till date), were identified.

This is aside the fact that NNPC channeled Nigeria’s precious crude — worth $35 billion –to swap deals between 2010 and 2014, the recent offshore processing agreements (OPAs) containing unbalanced terms that did not efficiently serve Nigeria’s needs and interest.

The report, whose executive summary was exclusively made available to PREMIUM TIMES ahead of its public release Tuesday or Wednesday, provided additional insight regarding the monumental corruption characterizing NNPC operations and those of its subsidiaries.

The document argued that NNPC’s approach to oil sales has remained riddled with corruption largely because of its inability to either develop its own commercial or operational capacities, or facilitate the growth of the sector through external investment.

Corroborating the NEITI, PwC and Reconciliation Committee’s assertions about NNPC’s legacy of inefficiency and mismanagement, NRGI researchers submitted that NNPC’s mismanagement of public revenues and its performance failures has persisted due to lack of political will by successive governments to reform the corporation.

The report pointed at the degenerating management of NNPC’s oil sales in recent years—and particularly since 2010.

The problems, it said, stemmed from the rising number of ad hoc, makeshift practices the corporation has introduced to work around its deeper structural problems.

For instance, the corporation entered into a poorly designed oil-for-product swap deals when it could no longer meet the country’s fuel needs.

Similarly, it began unilaterally spending billions of dollars in crude oil revenues each year, rather than transferring them to the treasury, because its actual budgets consistently fail to cover operating expenses.

Some of these makeshift practices began with credible goals, the report said. But over time, their operation became overly discretionary and complex, as political and patronage agendas surpassed the importance of maximizing returns.

The report identified five key areas bordering on the most pressing problems enveloping NNPC oil sales.

Researchers said they arrived at their findings after reviewing published and unpublished official records, together with data from trade publications and secondary literature, and conducted dozens of interviews between 2010 and 2015.

The report made valuable recommendations, which somehow buttressed a recent statement by Kaduna Governor, Nasir El-Rufai, about the need to either scrap the NNPC or reform the oil and gas sector as a whole.

Excerpts from the reports relating to the five summary issues are presented as images below:

1 2 3 4 5

 

All rights reserved. This material and any other material on this platform may not be reproduced, published, broadcast, written or distributed in full or in part, without written permission from PREMIUM TIMES.


  • Shahokaya

    We should render apologies to Sunusi Lamido. By the time PMB finishes securitizing NNPC Mobutu will turn in his grave and node in agreement that what a man can do a frog eyed woman can do better.

  • Fairgame

    May oil become $10 per barrel so that all the obsession over crude oil will die and people can finally kick start their dormant brains. The fixation on oil by the north to the exclusion of all else is just disturbing. Report after report and none can be independently verified. Figures always on oil but never on revenue lost from agriculture, customs, solid minerals, entertainment, tourism, sports, brain drain, and the list goes on. Always about niger delta oil. No wonder the people of that region believe that without their crude there will be no Nigeria. I now actually believe that. El Rufai and co will be advised to kick start the brains of the millions of their people in the north. Aba in the south east is always is a testament that innovation lifts people from poverty. Let Niger Delta take their oil, let other regions develop their resources! Enough of the obsession over crude oil. Switzerland has no oil. No natural resource. Yet it is one of the biggest exporters in the world. Shame on the daft governors who cannot run their states without allocation from crude oil sales through Abuja.

  • medscar

    …and with all of these, someone is saying “stealing is not corruption”. Are we for real in Nigeria?

  • favourtalk

    Thank God we didn’t vote wrong because it would have been a disaster if GEJ wins with loads of corruption in his tenure.
    Thank God we have baba

    • burning spear

      U voted for a brainless Fulani man who is obsessed with the oil–wells in the south south—-he cannot therefore take his janjaweed mind off–the resources of—other zones

      • Nemesis

        You Rivers people made that choice. During the civil war your young men began sneaking out of your land and joining the Nigerian army, and eventually returning with the Nigerian battalion that conquered Port Harcourt, blockading even the very essential commodities from the rest of Eastern Nigeria. Millions died of kwashiorkor because of your decision. All because of your hatred of one ethnic group that did you no wrong at all. So why the complaint now? You have said you would rather be slaves of the cattle rearers than be friends of your Igbo neighbors with whom you have intermarried and interchanged culture for centuries. How many Fulani marry your daughters, and how many Fulani women have your sons married, if you think they love you more than the Igbos? In your conscience can you name even a single evil thing that the Igbos did to the Rivers people that attracted the hatred? Too late to complain. The evil that men do live after them.

        • SBA

          Don’t mind him. He is a rabble rouser They remain the only people that failed to return Igbo properties after the civil war. Port Harcourt is littered with abandoned properties of Igbo people. At least Igbos had their properties in Yoruba land returned.

        • Bash

          The earlier you forget about this civil war and move forward the better for you and your tribe, the war did not just visit you but you asked for it and u got it period. Pls move forward

      • Rommel

        I hope you reflect on what Nemesis told you

  • sadiq Biu (sambisa)

    Flease, when is Baba go come comisurate wit is for Maiduguri? Even one man dem call am omo oloye come bisit us ze oza day.
    Ze tell us dat our baba go lead za war prom za front. As old coop flotter.
    Fee dee fee for hia tel us say baba is dey fear. But we zont belif dem.
    Flease and Flease, baba,try and sham dem and come. Unless na truth.
    And my prend for abuja tolds me dat dem say yor nam na now snail Baba.
    Say u even talk say u know say u be baba go slo.
    Flease papa, come see us o. We dey mutu like flies por dis place.
    Nagode baba.

  • redeem

    What would Nigerian have done without the oil that flows from the south south—-to feed the ungrateful 170 million parasites in the country—-can APC remove their eyes and noses from—–the crude oil wells for a second——————-

  • burning spear

    Tension over the allocation of Nigeria’s oil wealth among the states of the federation is assuming an interesting dimension with key figures in the South-South taking on the North over its recent call for a fiscal redress. The North, through the Arewa Consultative Forum (ACF) appears set its goal of changing the revenue allocation formular in its favour while the South-South described such calls as idle and insulting.One of the Niger Delta leaders even said the North is ungrateful to the South.

    • SBA

      Story, Story, Story!!!!!!!!!!

  • Olamide

    What a comprehensive report. Nigeria and Nigerians have been suffering because of all the oil thieves looting our treasury. We are glad the reports are coming out now.

  • Fairgame

    Nigerians only agree on money from crude oil. Thus the continuous obsession. But when it is election time Nigeria becomes a collection of tribes and the inter tribal hatred flows. Anyway unless a report is independently verified it is only a continuous manifestation of the obsession from the north especially over Niger Delta crude oil.

    • Etomi

      My dear brother, the truth is the average (bigoted, self-conceited and covetous) northerner believes that Niger Delta oil belongs to them, which unfortunately is why 90% of the oil blocks in the Niger Delta is in the control of northerners and their Yoruba collaborators…

      Would you remember the statement made by Usman Bugaje early last year?

      I urge you to refresh….

      The unfortunate statement was to the effect that since about 72% of Nigeria’s landmass is in the north, then the north is Nigeria, and Nigeria is the north…

      Then by implication the Niger Delta is nothing but the north’s satellite and hence the peoples of the Niger Delta are silly to think the oil in their land belongs to them…..

      We (Niger Delta peoples) must therefore be very careful not to tacitly acquiesce to this dastardly suggestion of the ethnic thieves…

      We must vigorously and vehemently controvert such a suggestion at every given opportunity…..

      For “quic quid plantatur solo solo cedit” (he who owns the land owns everything beneath and above it).

      Just as there is Yorubaland, Hausaland, Igbirraland, etc, so we have Ijawland, Urhoboland, Ukwuaniland, Ikwerreland, Ibibioland, Itshekiriland, Okrikaland, etc….

      The oil in the lands of the peoples of the Niger Delta is in its very self the lands of the peoples of the Niger Delta….

      So when you are mining the oil, remember that you are mining off Niger Delta peoples’ land….

      And the money made therefrom is not just money from mineral oil, but fundamentally Niger Delta peoples’ money, ever before Nigeria would make a lame claim to it….

      And until Nigeria stops robbing Peter to pay Paul, this country would know no unity, peace or progress!!!!!

      • Remi

        What did your son do for Niger Delta? He did absolutely nothing. The Ogoni is still not cleared of oil polution despite availability of $1billion. So the problem is not where they come from but what they have done for us. Go to the north it is the same problem. There is no issue of tribe when they are sharing the resources among themselves.

        • Etomi

          We are by no means talking about who did or did not do what….

          Who did or did not do what is totally outside the ambit of the discourse, which is to the effect that Hausa people and their Yoruba collaborators are thieves in so far as they remain fixated and obsessed over land which is not theirs….

          Who did or did not do what is not a malady to be cured by the intervention of expropriators and expropriation!!!!

    • MARCUS GARVEY

      Former Petroleum Resources Minister, Prof. Tam David-West, blamed former military president, Gen. Ibrahim Badamosi Babangida (rtd) for the lopsidedness in the award of oil blocks in favour of Northerners. David-West, who spoke on the heels of the revelations that 83 per cent of oil blocks are owned by Northerners, described the situation as “unacceptable and politically explosive.”
      The professor of Virology said strict rules were set aside during Babangida’s regime in awarding the blocks, adding that his successor in office, Prof. Jubril Aminu, even awarded an oil bloc without reference to any.
      He challenged Aminu to deny his claim, stressing that he has documents to back his allegation.. All these terrible management of oil started during the tenure of Babangida when most of the strict rules were set aside. “It is very unacceptable and politically explosive to have a situation where 83 per cent of oil blocs belong to people from a particular section of the country, especially when oil is the main stay of the country’s economy.”
      He was shocked one of the oil blocks belongs to Rilwan Lukman, a former Minister of Petroleum. “It is very unfortunate and terrible for an oil minister to own an oil block. It is corruption. During Buhari’s tenure, we kept strictly to the rules – due process. A situation where an oil minister owns oil block or petrol stations is the height of corruption,” he said.
      David-West urged the government to get to the root of the revelation, saying the allegations must not be brushed aside. WHAT A SHAME

  • Chris1408

    What a man can do, Deziani and NOI can do better. This is more than stealing and corruption put together. This is wickedness beyond words can explain.

    • Etomi

      I hate trial and judgment by the court of public opinion…

      It is not enough for these people to be merely accused of stealing; the anti-graft agencies should proceed to lodge a criminal charge against them in a court of competent jurisdiction….

      I hate to speculate that any stealing has been perpetrated by those being accused….

      If Buhari stops short at merely calling them names without prosecuting them, then he’s only playing politics, and Nigerians must be wary of such a gambit…

      If Buhari had succeeded an APC government like his would he talking of probe???

      Do we mean that for the singular fact that a politician worked so very hard to install Buhari into office, then he’s a divine saint above probe?

      Is it not the case Nigerian politicians work hard to install a government into office in exchange of enjoying such government’s patronage and protection from the long arms of the law?

      Would Buhari probe the likes of Amaechi, who brazenly and in alleged gangster fashion raped Rivers State treasury?

      Would he probe Tinubu, Obasanjo, etc?

      Which is why I urge Nigerians to be careful and not celebrate as yet; because some of us are yet to be convinced that this Buhari probe thingy is bona fide!!!!

      • FunnyKator

        Great comment!

    • FunnyKator

      Where is your proof? You have none so go back to sleep. Nonsense mtcheew

  • BURNING SPEAR

    Eighty-three per cent of all present oil blocks are held by northerners,” Enang said on the floor of the Senate, without any of the senior lawmakers contradicting him.

    Enang, representing Akwa Ibom North-East (Uyo) Senatorial District, therefore demanded a review of oil block licences in the country even as other senators from the South urged him on.

    Enang’s disclosures came a day after the debate on the Petroleum Industry Bill had split the senators along North-South lines. The senators held a rowdy session as those from the north stoutly opposed the provision of 10 per cent Host Community Fund in the bill.

  • Marcus Garvey

    Former Petroleum Resources Minister, Prof. Tam David-West, blamed former military president, Gen. Ibrahim Badamosi Babangida (rtd) for the lopsidedness in the award of oil blocks in favour of Northerners. David-West, who spoke on the heels of the revelations that 83 per cent of oil blocks are owned by Northerners, described the situation as “unacceptable and politically explosive.”
    The professor of Virology said strict rules were set aside during Babangida’s regime in awarding the blocks, adding that his successor in office, Prof. Jubril Aminu, even awarded an oil bloc without reference to any.
    He challenged Aminu to deny his claim, stressing that he has documents to back his allegation.. All these terrible management of oil started during the tenure of Babangida when most of the strict rules were set aside. “It is very unacceptable and politically explosive to have a situation where 83 per cent of oil blocs belong to people from a particular section of the country, especially when oil is the main stay of the country’s economy.”
    He was shocked one of the oil blocks belongs to Rilwan Lukman, a former Minister of Petroleum. “It is very unfortunate and terrible for an oil minister to own an oil block. It is corruption. During Buhari’s tenure, we kept strictly to the rules – due process. A situation where an oil minister owns oil block or petrol stations is the height of corruption,” he said.
    David-West urged the government to get to the root of the revelation, saying the allegations must not be brushed aside.

  • MushinSpeaks

    It would have been worse if GEJ was re-elected. CHANGE is here…. Lets hope our looted funds are returned.

    • BURNING SPEAR

      Don’t the Fulanis have cows that can earn the nation some foreign exchange-OR GROUNDNUT PYRAMIDS ATI COTTON–MAY BE THE Yorubas WITH THEIR COCOA–PLS—let us look into those areas–for once—–At least the FULANIS can start PAYING TAX–on their cows from Senegal abi–?–AGAIN NIGERIA is over 54 years old–out of which JONATHAN SPENT ONLY 5 YEARS—-THE REMAINING 49 YEARS NKO? 12 WENT TO THE YORUBAS–THE REMAINING 37 YRS NKO-sho which can trouble be this?-AWARE OIL WAS DISCOVERED IN 1957—SO HOW MUCH OIL REVENUE HAS ACCRUED TO NIGERIA FROM 1957 TO 2015?———–NO ANSWER——————SEPARATION IS THE ONLY ANSWER–NOT ANOTHER RULE BY THE FULANIS ATI YORUBAS—–that is why we say Jonathan was a blessing—-not a curse like Buhari——cheeeeeeeeeeeeeeeeeeeeeeeeers

      • FunnyKator

        Some good points

    • FunnyKator

      How do you know that? You be oracle? MushinYarnsRubbish!

  • BURNING SPEAR

    Don’t the Fulanis have cows that can earn the nation some foreign exchange-OR GROUNDNUT PYRAMIDS ATI COTTON–MAY BE THE Yorubas WITH THEIR COCOA–PLS—let us look into those areas–for once—–At least the FULANIS can start PAYING TAX–on their cows from Senegal abi–?–AGAIN NIGERIA is over 54 years old–out of which JONATHAN SPENT ONLY 5 YEARS—-THE REMAINING 49 YEARS NKO? 12 WENT TO THE YORUBAS-WHAT ABOUT D OTHER 37 YRS –Sho which can trouble be this?-AWARE OIL WAS DISCOVERED IN 1957—SO HOW MUCH OIL REVENUE HAS ACCRUED TO NIGERIA FROM 1957 TO 2015?———–NO ANSWER——————SEPARATION IS THE ONLY ANSWER–NOT ANOTHER RULE BY THE FULANIS ATI YORUBAS—–that is why we say Jonathan was a blessing—-not a curse like Buhari—-WHO HAS REFUSED TO REMOVE HIS MIND FROM THE OIL WELLS–AWARE HE WAS ONCE ACCUSED OF STEALING MONEY FROM THE CRUDE OIL BLOCKS IN THE SS——–YET HE WOULD NOT LEAVE THAT PLACE ALONE———-WHY–cheeeeeeeeeeeeeeeeeeeeeeeeers

    Reply

    Share ›

    • redeem

      Bailout: Jonathan Generated the Funds Used – NLNG MD.

      The Managing Director of Nigerian Liquefied Natural Gas, NLNG, Ltd, Babs Omotowa has insisted that the N1.2 trillion bailout fund for States was generated by the administration of former President Goodluck Jonathan.

      Omotowa who made this known in an interview refuted claims by the presidency claiming the fund was not generated from Jonathan’s administration.

      The NLNG boss while confirming that $1.6bn was paid to the Government from operations said “We did not pay the government $1.6billion dividend but $1.6billion corporate income and education tax, which is different from dividend.”

      He however insisted that “this of course is from our activities in 2014.”

      Following the plea by some State Governors to President Muhammadu Buhari for rescue in order to pay workers salary, Buhari assented to the release of the sum of N1.2 trillion last week.

      At least 12 of the 36 States including Osun, Rivers, Oyo, Ekiti, Kwara, Kogi, Ondo, Plateau, Benue, and Bauchi states are believed to owe their workers over N110billion in salaries and allowances.

      Following the release of the fund, the Peoples Democratic Party (PDP) in a statement through its National Publicity Secretary, Olisa Metuh insisted that the fund was saved by the immediate past administration.

      “It is gratifying to note that gradually the evidence of monies left behind by the PDP-led administration is coming to public light despite effort by the new government to hide the facts.
      “The public had been made aware that $2 billion was left in the ECA for which the Accountant–General and the APC confirmed approvals for the withdrawal of $1.7 billion.” The statement read. what a shame

      • FunnyKator

        Thanks for posting this. It is the best way to refute the lies and fraud of the propagandists on this forum.

  • Dazmillion

    Like Soyinka said: 2 more years of Jonathan government and there will not be a country called Nigeria.

    • FunnyKator

      yawn zzzzzzzzzzzzzzzzz

      Na your papa be dat for picsure?

  • FunnyKator

    Sounds like a good report. Lets hope the government acts on it.