EXCLUSIVE-Nigeria loses billions in cut price oil deals-report
ABUJA,
Oct 24 (Reuters) - Nigeria lost out on tens of billions of dollars in oil and
gas revenues over the last decade from cut price deals struck between
multinational oil companies and government officials, a confidential report
seen by Reuters says.
A
team headed by the former head of the anti-corruption agency Nuhu Ribadu
produced the 146-page study on an oil ministry request. It covers the year 2002
to the present.
Nigeria
is Africa's largest crude oil exporter, shipping more than 2 million barrels
per day (bpd), and is also home to the world's ninth biggest gas reserves and
one of its largest Liquefied Natural Gas (LNG) export terminals.
The
report provides new details on Nigeria's long history of corruption in the oil
sector, which has enriched its elite and provided the oil majors with hefty
profits while two thirds of people live in poverty.
Oil
Minister Diezani Alison-Madueke told Reuters on Tuesday she had received the
report last month but that it was a draft and the government was still supposed
to give input. The one seen by Reuters was labelled "Final Report."
The
report concluded that oil majors Shell, Total and Eni made bumper profits from
cut-price gas, while Nigerian oil ministers handed out licences at their own
discretion. This, while not illegal, did not follow best practice of using open
bids. Hundreds of millions of dollars in signature bonuses on those deals were
also missing, it said.
"We
have not seen this report and are, therefore, unable to comment on the content,
but we will study it if and when it is published," a Shell spokesman
said.
The
report alleges international oil traders sometimes buy crude without any formal
contracts, and the state oil firm had short-changed the Nigerian treasury
billions over the last 10 years by selling crude oil and gas to itself below
market rates.
There
was no suggestion that the oil majors or traders had done anything illegal, but
the report highlighted a lack of transparency in their dealings in a nation
rife with graft.
"It
is a draft," Alison-Madueke said. "There will be some areas where the
government ... may have a slightly different opinion ... (and) will put its
point of view to the committee."
She
said she expects the final report to be with President Goodluck Jonathan within
two weeks.
MISSING
BILLIONS
Ribadu's
probe was among several set up following a week of nationwide strikes against a
rise in fuel prices in January, which morphed into a campaign against oil
corruption.
Billions
of dollars of revenue was missing in unpaid debts from signature bonuses and
royalties, the report found.
Nigeria
LNG, a company jointly owned by the NNPC, Shell, Total and Eni had paid the
country for gas at cut-down prices before exporting it to international
markets, the report said.
Total
and Eni declined to comment because they invest in but do not operate Nigeria
LNG, the role played by Shell.
"The
estimated cumulative of the deficit between value obtainable on the
international market and what is currently being obtained from NLNG, over the
10 year period, amounts to approximately $29 billion," the report
said.
It
also said foreign oil firms had outstanding debts.
Addax,
now a unit of China's state-owned Sinopec, owes Nigeria $1.5 billion in unpaid
royalties, part of a $3 billion black hole of unpaid bonuses and royalties owed
by oil firms.
Addax
did not respond to requests for comment, but the report noted it disputes owing
the signature bonuses.
Shell
owes Nigeria's government 137.57 billion naira ($874 million) for gas sold from
its Bonga deep offshore field, the report said, while oil majors owed $58
million between them for gas flaring penalties. They were also not adhering to
newer higher fines.
The
probe also said Nigeria was the only nation to sell all its crude through
international oil traders rather than directly to refineries, adding that such
trades were often opaque.
INFORMAL
TRADING
It
said some international oil traders who were not "on the approved master
list of customers" had been sold crude oil "without a formal
contract" so little could be obtained about the details of these deals,
which can be worth hundreds of millions of dollars.
"This
logically will serve to reduce margins obtainable on sale of crude oil,"
the report said.
But
Alison-Madueke disputed this, saying there are no informal contracts and there
is "an official tender put out every year", which can be seen by the
public in newspapers.
The
state oil firm gets an allocation of 445,000 bpd of crude oil to refine locally
but it has been selling itself this oil at cut-down prices, a practice which
cost Nigeria $5 billion in potential revenue between 2002-2011, the report
said.
"NNPC
buys at international rates," Alison-Madueke retorted.
The
report said the NNPC made 86.6 billion naira over the 10-year period by using
overly generous exchange rates in its declarations to the government. There was
no sign of the money.
Nigerian
oil ministers between 2008-2011 handed out seven discretionary licences but
there is $183 million in signature bonuses missing from the deals, the report
said. Three of these oil licences were awarded since Alison-Madueke took up her
position in 2010, according to the report.
"I
have not given any discretionary awards during this administration,"
Alison-Madueke told Reuters, although she added that the president had the
right to do so instead of using bids if he saw fit. "That is entirely up
to him," she said.
Among
the report's recommendations were that parts of NNPC be reorganised or
scrapped, an independent review of the use of traders be set up and a
transparency law be passed requiring oil companies to disclose all payments
made to Nigeria.
U.S.
regulators put new rules in place in August that will require U.S.-listed oil
and gas companies to disclose payments they make to foreign governments like
Nigeria.
No comments:
Post a Comment