In December 2010, thw Nigerian National Petroleum Corporation, NNPC, entered a three-month trial crude oil transportation deal with PPP Fluid Mechanics, at the cost of $17.4 million.
Another firm, Ocean Marine Securities, was called in to handle the security component of the project at the rate of $9.9 million. The details of this project, including how the pricing later escalated and how Nigerian procurement regulations were flouted was revealed in a recent PREMIUM TIMES’ investigation.
In this interview, Yinka Omorogbe, the corporation’s former legal adviser, exonerates self of both the first deal and how it later turned out.
Prof. Omorogbe said there was no board meeting during her tenure to discuss the crude oil transportation contract. She also said she was unaware of the security component of the contract and how the entire contract was later renegotiated while she was still in office.
Read excerpts below.
PT: The crude oil transportation contract (between NNPC and PPP FM/OMS) was awarded in December 2010, during your tenure at NNPC. Can you tell us what you know about the contract?
Omorogbe: I can’t say it was during my tenure. If you look at the document you have shown me, it is a re-issued letter of intent. So, there was already something in the offering and there was a letter of intent that was brought out. It was part of a process. It had to do with PPP Fluid Mechanics and had nothing to do with any of the individuals you have mentioned in your story.
PT: At the point the contract was initiated, the PPP Fluid Mechanics was owned by two Israelis?
Omorogbe: I wouldn’t know. In one year, hundreds of letters of intent are signed. They are not negotiated by me at all. As secretary to the corporation, there were departments under me and these departments dealt with these things, after they have been brought by the
The directorate that would go and check about whatever is behind any of these things is Refining and Petrochemicals. And in 2010, Refining and Petrochemicals was headed by Austin Oniwon, who was also the GMD at the time. So anything happening then would have to be directed to him. I have absolutely nothing to do with the contract and there was nothing like a board meeting concerning it during my tenure.
PT: Are you saying there was no board meeting to discuss the crude oil transportation deal?
Omorogbe: No. Not in 2010. If you look at that 2010 document you are talking about, it was a three-month stop gap measure. That is why they still issued another. It is to let business continue. Because you cannot basically allow the operations to stop, otherwise businesses grind to a halt. So there was no contract during my tenure. Nothing happened in my time. The board did not sit and discuss this contract and definitely, the people you are investigating had no contact whatsoever in the agreement you have.
PT: But our findings show that the security component of the project was handled by Ocean Marin Securities which is owned by Tunde Ayeni and Idahosa Okunbor. They deployed six gunboats for the project and got $110,000 daily.
Omorogbe: I know nothing about this. What do you see that links me with it?
PT: But you were still the company secretary at the time the deal was sealed Ma?
Omorogbe: I might have been the company secretary but did they tell you that this contract emanated at that point in time? No. They did not. I am categorically certain. It did not happen during my tenure. Show me an agreement with Ocean Marine and the NNPC prior to my entry into the NNPC and then we can talk. But if not, I you will just be speculating. In the absence of an agreement, I can’t answer your question. I can only tell you what I read in the newspapers.
PT: But we have been told by top officials of PPP FM and OMS that the contract started in 2011?
Omorogbe: With the Israelis, which I have only read about? That is not true. Who signed the letter of intent you have? Every letter of intent is signed by the secretary of the corporation or by somebody so delegated. The one you have is signed by the GM… Who, probably, delegated the power. But what do you have on Ocean Marine? Nothing.
PT: Ocean Marine has shown us documents saying NNPC mandated them to provide security for the contract at $110,000 per day, which is about $3.3 million for a month of 30 days. Are you saying you didn’t know anything about that too?
Omorogbe: Not even a pin. I have no clue. My source of knowledge would be the newspapers. I have nothing to do with that. Since it did not come up under my tenure, there was no way I would know.
PT: But Madam, from the document we have here, it shows it was at the time you were there. The letter is dated December 2010 and you were still with the corporation at that time.
Omorogbe: First of all, who is it with? It is with PPP Fluid Mechanics or is it with Ocean Marine Securities? Whatever they are doing with Ocean Marine has nothing to do with me. Not even me, it has nothing to do with the corporation on the face of the document you have (Letter of Intent with PPP FM), because it is based on the document that we are talking about.
What is the reason for this? This is transportation of crude oil using specified marine vessels from Escravos to Warri Refining and Petrochemicals. It is a very legal entity because they have to transport crude.
PT: We are not arguing the fact that it’s normal (to transport crude using ships)…
Omorogbe: No no no no. Because you seem to be saying: oh, it was in my tenure, it was in my tenure. So what are you saying?
PT: We have met with Ocean Marin Securities about the security component of this project.
Omorogbe [Cuts in]: Let me be very clear, I have nothing to do with this. Except you want to discuss something else or discuss my link with them. My tenure ended in June 2011 in the NNPC and whatever my stand was in NNPC was clear: anything that occurred after June 2011, I cannot tell you. Ocean Marine is an entity unknown to me as the legal adviser of NNPC, unless you bring a contract to me… It is totally unknown to me in my capacity. So, I can’t even talk Ocean Marine. I can talk PPP Fluid Mechanics because of this particular letter of intent that you have. But any contract with these people (Ocean Marine) that were brought on board was after my time.
PT: As you know, this contract continued after it (the trial version) ended in March 2011?
Omorogbe [Cuts in]: No, it was re-issued. That is the thing. The contract came to an end. This paper that was during my tenure came to an end. And it was re-issued at whatever time? I don’t know.
PT: Are you saying it wasn’t re-issued during your time?
Omorogbe: If it was, bring me it to see. I did not see. You mean the letter of intent you have?
PT: Yes. Are you aware it was re-issued in …
Omorogbe [Cuts in]: I wasn’t even aware. It doesn’t ring a bell. It didn’t ring a bell around me. No; not at all. Bring the re-issue thing and let me see.
PT: Ocean Marine Securities and the guys who later headed PPP FM have told us they continued this contract since April 2011.
Omorogbe: Maybe they did. Let me see the paper at that point in time. Maybe they did. I cannot say anything on that but I can say that I have nothing to do with any of the stuff you are talking about. My problem with your article was that you alluded that somehow the board was paid and the board now passed…
PT: No. We never mentioned that the board was paid. One other thing we would like to ask is that from our investigation, the total cost of this project was (slightly) above $27 million … above the board’s approval limit.
Omorogbe [Cuts in]: Not in my tenure. Not in my tenure. I don’t know how you are going to get out of that one. We never went above the approval limit.
PT: This is the part we are talking about in this contract.
Omorogbe: Look at the document very well. It’s says the “NNPC shall provide security cover”… Where does Ocean Marin Securities come into this?
PT: That is where they come in because they said they were paid $110,000 daily to…
Omorogbe: They may have said. Show me the contract. Are you trying to link me to this thing?
PT: No, we are not linking you. But we just want to find out if you were aware, because if you were not aware, this contract might have existed in illegality. It might have been an illegal thing happening which you might not have been aware.
Omorogbe: No. You see, they are to provide security. Let me talk about this as a lawyer. I’m talking as a lawyer. When you do this sort of thing and you put a clause that assigns an obligation to the NNPC, it means NNPC must carry it out. So here, it is stated that the NNPC shall provide security cover, it means that if for example, PPP FM goes and does the job and there is no security cover, and something happens, they can say oh well, you did not keep to your own side of the bargain. They are covered by this. So that provided an opening for NNPC to provide security without a doubt, but a security cover, I knew nothing about it. That’s it.
PT: Can that cover be provided without a valid contract?
Omorogbe: No, there must be something in existence. Or maybe not. It depends on the security cover because remember that different entities patrol the Nigerian waterways. The Navy patrols the waterways, maybe Marine police, maybe even Tompolo’s contract too, who knows?
PT: But is that a valid clause in a contract like this?
Omorogbe: Again, talking from my perspective, I would have to say yes, because put yourself in the position of somebody whose job it is to carry very valuable cargo on Nigeria’s inland waterways which are very unsafe, you will be concerned about the security. I would make them pay for the security or at least guarantee it. In fact, it will be easier for me to say you guarantee it so that I won’t be liable if anything happens. So, it makes sense on the face of it.
PT: If it makes sense, it therefore means that it (security) can be considered as a valid component of the project.
Omorogbe: Yeah. But again, it is not a component of the project. In this instance, it is a component that the corporation has said it will provide. So for me, if it was my contract, I will be happy in the sense that the corporation, by doing that, would have exonerated me in case something happens to the cargo and the vessel and there is no security, I can say well, it is not my legal obligation to provide security.
PT: What I am driving at is that this could be said to add up to the total cost of the project.
Omorogbe: NNPC is the one to provide that cost. So whatever the cost is for security is separate from the costs that are included in the letter of intent. But security costs may be inevitable when you are talking about a place where there have been so much unrest, vandalism and whatever.