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Diversion of Nigerian oil proceeds: Genocide not financial crime!

June 14, 2009

A major problem with this country is that we don’t have the culture of keeping records and those who know don’t talk.

Assigning Odein Ajumogobia, the Junior Minister of Petroleum to lead the Ministry’s and NNPC’s presentation at the probe panel of the House of Representatives ad-hoc committee was an insult by the federal government on the sensibilities of the Nigerian people.

Where is the Petroleum Minister, Dr Rilwanu Lukman who has been in charge of the Ministry and NNPC either by direct involvement or by proxy since I was in the primary school?

Throughout the dark era being investigated, 1999- date, Dr Lukman has been sitting firmly in full control of the nation’s oil interests in several capacities as an adviser, friend, oil and gas envoy, and now a father.

It was very embarrassing for the NNPC GMD Sanusi Barkindo at the House Committee probe panel to say that, “all issues raised have been examined by an internationally reputed institute, Nigerian Extractive Industry Transparency Initiative (NEITI) and we were given a clean bill of health.” This was a deliberate obfuscation of facts or more aptly an outright lie. It has been severally said that NEITI would get into problem of credibility because of the way it in-grafted itself into the Presidency and this NNPC matter may just be the beginning of it.

The Neiti- commissioned Hart Grant Audit report, which this authour has read, did not in any way give the NNPC a clean bill on fraud, corruption, and blurred accounting practices rather it raised some of the issues the House pinched especially within the time frame 1999-2004 covered by the report and made recommendations on how to avert future occurrence of such massive fraud or rather blurred accounting practices.

In an article: “NEITI Vs NNPC on Fraud: What Dakouru and National Assembly Must Do” widely published in the media (print and web-based) in 2007, this authour suggested that “the Minister (Dakouru) should as a matter of urgency re-open debate on the Hart Grant NEITI Audit Report to discuss the established fraud and diversion of oil proceeds by the NNPC and its subsidiaries within the period covered by the review. And if the Minister fails, then the onus falls on the National Assembly to transparently re-open the NEITI allegations of gross misappropriation and massive fraud in the NNPC and the DPR where oil blocs were given away without a single record of payment….”

Thank God that the National Assembly has finally woken up, however it is too late or rather unfortunately coming up at this time when some of the major players who could have been facing trial are currently at the helm of affairs both at the NPPC and the office of the Minister of Petroleum Resources. The two people in charge worked directly in some of the worst culprit NNPC strategic business units especially those in London.

Gen Obasanjo as Head of State signed the enabling statute that established the NNPC, Decree 33, into law on 21 April 1977. And Section 6, Sub-Section 1 of the law stipulates that, “The Corporation shall keep proper accounts and proper records in relation thereto in a form which shall conform to the best commercial standards”.
Sub-Section 2 stipulates that, “The Corporation shall as soon as may be after the end of the financial year to which the accounts relate cause its accounts to be audited by auditors appointed by the Corporation with the approval of the Federal Executive Council”.

Under Sub-Section 3, “The auditors shall, on the completion of the audit of the accounts of the Corporation for each financial year, prepare and submit to the Corporation reports setting out –– (a) general observations and recommendations of the auditors on the financial affairs of the Corporation for the year and on any important matters which the auditors desire to bring to the notice of the Corporation and, (b) detailed observations and recommendations of the auditors on all aspects of the operations of the Corporation for that year”.
NEITI in its 2006 audit report covering 1999-2004 made detailed observations and recommendations on the NNPC as stipulated by the enabling mandate. The crucial question is: what has the Federal Government and the NNPC done with the audit recommendations since 2006 when the report was submitted? Nothing!

As have been severally said, President Obasanjo, as Minister of Petroleum with Dr Rilwanu Lukman as his omni bus adviser and deputy, failed to audit the NNPC throughout his tenure in office (1999 to 2007). When NEITI in line with its mandate stepped- in and audited whatever they saw as the accounts in 2006, the transparency organisation found widespread discrepancies in NNPC’s financial records. What was Obasanjo’s (Lukman’s boss) reaction?

The former President outrightly rejected the report and arranged a mock audit which never came out with a single sentence as report. Even Nuhu Ribadu’s EFCC promised to investigate the discrepancies established by NEITI but it never did because the main culprit was his boss, Obasanjo and Lukman his witch doctor in the oil and gas sector.

Beyond Obasanjo, what of President Yar’Adua who has been in office for two years with his transparency and anti-corruption sing –song? He never saw any need to demand for the NNPC’s audited accounts for the two years he has been in charge. The Federal Executive Council, as well as the States and Local Governments as stakeholders in the affairs of NNPC are all guilty of negligence of their responsibilities as stipulated in Decree 33 of 1977. The other two tiers of government are only interested in sharing revenues from excess crude oil sales which they feast on at the expense of the real Nigerian people. Shame of a nation!
In 1999 and 2000, crude oil worth $66.7 million and $307 million respectively were allocated to Nap Oil, a grey company without any record of such deal in the NNPC books. The House ad-hoc committee should find out the actual owners of Napoil.

In 2004, crude oil worth $493 million was sold to Duck Oil and this money neither entered the NNPC account books nor hit the Federation Account. Who are the Nigerian business partners of Duck Oil? The House may also need to establish this.

The House Committee may also need to find out how the over 450, 000 barrels per day of crude oil meant for domestic refining was handled during the period 1999-2008.

If the NNPC in one year alone (2004) defrauded the nation of $349 billion by paying only $289 billion out of the $638 billion it recorded as receipt from oil sale, then it gives an idea of the magnitude of fraud in the system which was taken to a criminal height in the Obasanjo era.

The NNPC produces oil through one of its subsidiaries, the NPDC in its oil wells in Oredo Field. What is the daily production since those well came onstream and how has the oil been sold since it was not captured in the joint venture figures? How were the proceeds accounted for since they fall outside the existing joint venture arrangement?

Who are the real owners and/or the Nigerian partners of Ocean Oil, Noel Oil and Gas, Harsk Enterprises, MRS Oil that have lifted Nigerian crude oil for over a decade without a single record of any business transactions in the books of NNPC  and even registration with the Corporate Affairs Commission? As for Carlson Bermuda, the current NNPC GMD may be of help.

The truth is that the House of Representatives ad-hoc committee may just be scratching the surface in a very deep and serious case of fraud in the NNPC system and the Department of Petroleum Resources (DPR).

The interesting aspect of all the revelation so far borders on produced crude oil. The worst arena fraud is the Obasanjo’s evil conscription the PPPRA and the fuel importation money laundering business.

To convince Nigerians of their sincerity House should as a first step order for a comprehensive audit of the NNPC Accounts from maybe 2004-2009.

Without apologies to Members of the House ad-hoc committee, the ongoing probe of the NNPC will not produce any tangible results. Mark my word.

As suggested even as far back as 2007, the National Assembly should just re-open debate on the criminal diversions of Nigerian oil proceeds and its resultant genocide. Then an independent commission of inquiry comprising NEITI with representatives of EITI to check politicization of its Nigerian affiliate, civil societies, security agencies, lawmakers should set up to actually probe and stop this culture of stealing in the NNPC and DPR system.

Also, the NLC, NUPENG, PENGASSAN, NANS, Federal Inland Revenue Service, Customs and foreign missions especially those countries in Europe and America where the stolen monies are warehoused should be included as members of the inquiry.

This matter should be treated not just as financial crimes but as genocide as millions of Nigerians have been killed by denials of basic amenities of healthcare, electricity and portable water.

This suggestion has become imperative because it is now obvious that the National Assembly cannot in real terms probe anybody because members of both Houses of Parliament and the Presidency are convincingly guilty of complicity in this case of genocide.

IFEANYI IZEZE, ABUJA ([email protected])



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