Friday 23rd June, 2017
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The oil export business and NEITI's lamentations

The oil export business and NEITI's lamentations

Nigeria is known as a mo­no-economy because of the country’s dependence on revenue from oil for its sustenance. This has been so for many years now since we abandoned the agricultural produce which used to be our source of foreign exchange to focus on oil money. But the trag­edy is that the nation has not been able to manage the oil resources to the advantage of the people or check­mate those who are undermining the economy mindlessly through stealing of crude.
Ironically, sleaze and other kinds of corruption have made Nigeria, the 6th largest oil producing nation within the Organisation of Petroleum Exporting Countries (OPEC) and the 8th largest in the world, a laugh­ing stock in the eyes of the civilized world. The petroleum industry has become the cesspool of corruption and all kinds of shady deals to the detriment of the nation and all efforts to stem this ugly situation have met with resistance and failures because of entrenched personal interest in the system or what many may call ‘cabal’ in the industry.
Recently, the nation was shocked by a revelation made by an official of the Federal Ministry of Trade and In­vestment, Usman Ndanusa, a Deputy Director that Nigeria has no record of its oil and non-oil exports from June 2015 when this administration came to power till date. Ndanusa who represented his Minister at a public hearing organized by the Joint Sen­ate Committees on Finance, Trade and Investment, Gas, Petroleum Up­stream on “The need to investigate pre-shipment inspection of export activities in Nigeria”, lamented the abnormality in the oil export activi­ties in the country.
Ndanusa said that since June 2015, the country has been exporting its oil and non-oil products without meas­urement and documentation. He said this came about due to the disengage­ment of pre-shipment inspection agents at the various export terminals in the country when the government of President Buhari came on board. The new government according to him, replaced the former agents with their own agents “who were merely asked by the federal govern­ment without legal and constitutional backing to carry out the pre-ship­ment work at the terminals”.
He also stated that the Monitoring and Evaluation Agents, being fed­eral government workers who are ex­pected to monitor the pre-shipment agents refused to work due to non-payment of their entitlements. As such, nobody is supervising anybody, thus leaving the interest of the nation unprotected. During the hearing ses­sion, the Committee disclosed that it had discovered over $850 billion earned from crude oil export by Ni­geria between 1996 and 2014 which was not repatriated to the country by the Joint Venture Oil Companies (JVCs). This is a mind-boggling reve­lation which no nation can over-look.
The World Bank in a recent re­port also said that about $300 bil­lion of government oil funds over the years, cannot be accounted for due to fraudulent activities in the oil lifting in the Nigeria. The bank said that greater percentage of the money was stolen by corrupt leaders in the country. It could be recalled that previous regimes had appoint­ed questionable inspection agents to monitor oil lifting in the 21 termi­nals in the country without anybody checking their activities. For exam­ple, the Obasanjo regime appointed a company known as Cobalt Inter­national Services Limited (CISL) as pre-shipment inspectors of oil ex­ports in the country. The company was said to be a one-man affair. The two powerful unions in the oil and gas sector NUPENG and PENGAS­SAN kicked against this when it was discovered that CISL was allocated 1,900 barrels of oil per day which translated to $87.400 per day then.
Another company, Petrodal Re­sources Limited was also granted license to lift oil which attracted criticism from stakeholders in the industry as it was described also as “a one man concern unknown inter­nationally”. The company was said to be domiciled “in the Isle of Man and by the laws of the country, was not allowed to disclose its audited accounts or financial statements.” A panel constituted by government to investigate the oil lifting activities in the country in 2004 headed by Lawan Buba, in its report, said that Petrodal was allocated 90,000 bar­rels of crude oil per day. “The expo­sure of 90,000 b/d which translates to three crude oil cargoes of about 950,000 bbls each on monthly basis, is extensive for a solely owned “one-man” company”, said the panel in its report which was released in 2004.
The Nigeria Extractive Indus­try Initiative (NEITI) has cried out consistently in its reports on oil in­dustry in the country. Its reports consistently said that oil business in the country lacks accountability, making the country lose billions of oil revenue over time which ended in private pockets. In spite of all these, no concerted efforts have been made to reverse the ugly situ­ation which has brought the country to its current sorry pass. The AU­THORITY finds it hard to believe that this government which came to power on the wings of change and fighting corruption, can look the other way while shady deals are said to be going on in the oil terminals in the country. A situation where this administration sacked the previous pre-shipment agents due to per­ceived sleaze only to replace them with other agents who are not moni­tored is akin to robbing Peter to pay Paul.
We call on the government to take activities in the oil sector seriously. It is equally sad to hear that the few measuring equipment at the termi­nals are not functional. What this means is that the Nigeria National Petroleum Corporation (NNPC) is not alive to its duties. As the nation awaits Senate Committee report and action, we strongly recommend that somebody must be punished for this kind of infraction.

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