LAMENTATIONS by the Nigeria Extractive Industries Transparency Initiative that true owners of some oil blocks and other oil and gas assets cannot be identified from the records of the Corporate Affairs Commission underline the opacity and gargantuan corruption that have defined our oil sector for decades. Such shenanigans undermine NEITI’s operations. It is, therefore, incumbent on its leadership to sensitise the Federal Government to the need to tackle the problem.
An interactive engagement, which the Acting Executive Secretary of NEITI, Orji Ogbonnaya, had with Fredrik Reinfeldt, Chairman of the global IETI, and civil society organisations on a visit to Nigeria provided an opportunity for such disclosure.
Orji said, “Our challenge is that we try to reflect this issue of beneficial ownership in our report; but the CAC is where you register legitimate companies doing business in Nigeria. If you go to CAC, the information that you find has no relationship with what you know. That is, those you know as the owners of those oil blocks.”
Oil block bidding in Nigeria is a cloak-and-dagger affair. Legitimate owners of certain blocks are resolved by a raft of litigation, just as official compromises regularly coalesce with the dubious designs of bidders to jeopardise national interest. Not a few times, oil wells have been sold at give-away prices to those in the corridors of power through their surrogates. In some cases, allocations are used to oil the vile patronage system of corrupt administrations, resulting in those without the necessary technical and financial capacities acquiring blocks. Ultimately, they hawk them within and outside the country to become emergency billionaires.
The Petroleum Industry Bill forwarded to the National Assembly in 2009, was meant to bring sanity to this opaque template. Unfortunately, seven years after, it has remained a victim of a conspiracy by vested interests who want the mess to continue. We reject their shenanigans.
For a start, President Muhammadu Buhari’s government should, without delay, revoke the operational licences of all oil blocks whose ownership is shrouded in secrecy. From all intents and purposes, such firms are dubious. Nigeria annually loses revenue from signature bonuses, royalties and company tax as a result. This is evident in several NEITI reports, which state that $7.5 billion has been lost on these scores since 1999. A former executive secretary of NEITI, Zainab Ahmed, now a minister, once said this amount “represents clear cases of underpayments…”
When transparency is lacking, genuine investors steer clear. This happened when the May 11, 2007 bid rounds were opened. Government had allegedly given a Chinese firm the right of first refusal for the acquisition of some juicy acreage to the disadvantage of other investors – both local and foreign – who reasoned that the bid round was a circus show. More eerily, the timing was inauspicious, as it was too close to the May 29 handover date to a new government, whose fidelity to any oil contract it was not part of was suspect.
In one of the ill-fated bid rounds under the late President Umaru Yar’Adua, his spokesman, Segun Adeniyi, in his book: Power, Politics and Death, gave a vivid account of what often happened during such transactions. He wrote, “There was an enormous pressure on the President to take the negotiation away from the technocrats and domicile it in the hands of a team comprising trusted politicians and officials, including those known to have the President’s ears.”
The oil sector operates in a global environment. Therefore, all international protocols that govern its operations should be observed. It behoves Buhari, who is not a novice in the sector, having served as oil minister in the late 1970s and is still in charge of the ministry as president, to ensure that an enduring reform in this critical sector of the economy is carried out.
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