The campaign group Global Witness has calculated the OPL 245 deal in 2011 deprived Nigeria of double its annual education and healthcare budget.
 
Eni and Shell are accused of knowing the money they paid to Nigeria would be used for bribes.
 
The Italian and Anglo-Dutch energy giants deny any wrongdoing.
 
This unfolding scandal, which is being played out in an Italian court, has involved former MI6 officers, the FBI, a former President of Nigeria, as well as current and former senior executives at the two oil companies.
 
The former Nigerian oil minister, Dan Etete, was found guilty by a court in France of money laundering and it emerged he used illicit funds to buy a speed boat and a chateau. It is also claimed he had so much cash in $100 bills that it weighed five tonnes.
 
Shell is one of the oil firms facing corruption charges
Global Witness has spent years investigating the deal which gave Shell and Eni the rights to explore OPL 245, an offshore oil field in the Niger Delta.
 
It has commissioned new analysis of the way the contract was altered in favour of the energy companies and concluded Nigeria's losses over the lifetime of the project could amount to $5.86bn, compared to terms in place before 2011.
 
Oil giants face Nigeria 'corruption' trial
New evidence in Shell corruption probe
The analysis was carried out by Resources for Development Consulting on behalf of Global Witness, as well as the NGOs HEDA, RE:Common and The Corner. The estimated losses were calculated using an oil price of $70 a barrel as a basis.
 
Eni has criticised the way it was calculated because it ignores the possibility that Nigeria had the right to revise the deal to claim a 50% share of the production revenues.
 
Deal or no deal
Campaigners say the deal should be cancelled.
 
"We discovered that Shell had constructed a deal that cut Nigeria out of their share of profit oil from the block," Ava Lee, a campaigner at Global Witness told the BBC's World Business Report.
 
"This amount of money would be enough to educate six million teachers in Nigeria. It really can't be underestimated just how big a deal this could be for a country that right now has the highest rates of extreme poverty in the world."
 
Nigeria is the richest economy in Africa, but despite having large resources of oil and gas millions of people are poor.
 
It is understandable why Eni and Shell wanted to acquire the rights to develop OPL 245, because it is estimated to contain nine billion barrels of oil.
 
But the process of how they secured the contract is dogged by claims of corruption.
 
The court in Milan is weighing evidence of how a former Nigerian oil minister, Dan Etete, awarded ownership of OPL 245 to Malabu, a company he secretly controlled.
 
He is accused of paying bribes to others in the government, such as former President Goodluck Jonathan, to ensure that process went smoothly.
 
Shell and Eni are accused of knowing the $1.1bn they paid to Nigeria would be used for bribes, claims based on the content of emails which have since emerged.
 
"Looking at the emails it seems that Shell knew that the deal they were constructing was misleading but they went ahead with it anyway even though a number of Nigerian officials raised concerns about this scandalous, scandalous deal," says Ava Lee from Global Witness.
 
No wrongdoing
The Anglo-Dutch and Italian energy giants insist they have done nothing wrong, because they paid the money to secure the exploration rights directly to the Nigerian government.
 
Shell issued a statement to BBC World Business Report saying: "Since this matter is before the Tribunal of Milan it would not be appropriate for us to comment in detail. Issues that are under consideration as part of a trial process should be adjudicated in court and we do not wish to interfere with this process.
 
"We maintain that the settlement was a fully legal transaction and we believe the trial judges in Italy will conclude that there is no case against Shell or its former employees."
 
Eni has also denied any wrongdoing and told the BBC that it questions the competence of the experts commissioned by Global Witness and its "partners", as well as raising the possibility that the report by the campaign group is defamatory.
 
Shell accused of abuses in Nigeria
The Italian oil and gas company said "as this matter is currently before the Tribunal of Milan, we are unable to comment in detail".
 
In a statement it noted: "Global Witness together with its partners Corner House, HEDA Resource Centre and Re: Common had requested twice to be admitted as aggrieved parties in the Milan proceedings. On both occasions, the request was firmly denied by the Tribunal of Milan."
 
Eni also said it "continues to reject any allegation of impropriety or irregularity in connection with this transaction".
 
Biggest ever corruption case
Campaigners believe this is a landmark case and the outcome of the trial in Milan will cause an earthquake to reverberate through the oil and gas industry.
 
Nigeria's leader is being encouraged to intervene by Olanrewaju Suraju, from HEDA. "President Buhari should reject any deal," he said.
 
The contrast between the way Italy deals with migrants and the actions of one of the nation's biggest companies has been raised by Antonio Tricarico of Re;Common.
 
"The Italian government is discouraging Nigerian migrants trying to reach Italy by claiming that it will help them at home, but Italy's biggest multi-national, part owned by the state, is accused of scamming billions from the Nigerian people."
 
The outcome of the unprecedented court case in Milan could force the oil industry to change how it conducts its business, especially in countries where corruption is rife, because more transparency about contracts and payments made would discourage fraud.
 
 
Source: BBC
A New Liquefied Natural Gas plant with a capacity of 2,250 tonnes per day has been inaugurated by Greenville Oil and Gas Company Limited in Rivers State.
 
The plant is worth $500 million with an annual capacity of 750 million tonnes.
 
The Chairman, Greenville LNG, Eddy Broeke, said at the occasion: “Our mission is to bridge the natural gas supply gap in order to promote economic and social development and revive moribund industries across the country. We’ve invested about $450m to $500m on this project.
 
“And this is because we have to build the whole infrastructure on our own, which includes the construction of filling stations for our product on strategic locations across the country.
 
“Environment wise, this is going to be a full revolution, especially in transportation methods. With respect to transportation, permit me to say that what we are bringing into Nigeria and Africa is the first set of trucks that are fuelled by LNG. Normally, this should reduce the price of transportation and logistics by about 35 to 40 per cent.”
 
The Greenville chairman also said the product would serve electricity generation plants that found it tough to get gas through pipelines.
 
 
Source: NAN
 

The Nigerian National Petroleum Corporation (NNPC) has said the Kaduna Refinery and Petrochemical Company accrued loss totalling N18.67 billion in seven months this year as it was idle for the same period.

According to the monthly report prepared by NNPC, the refinery lost N3.81bn in February, N2.63bn in March, N4.22bn in May, N2.98bn in June, N2.35bn in July, and N2.68bn in August, but made a profit of N2.96bn in April.

There are four refineries in the country with two in Port Harcourt and one each in Kaduna and Warri, with an installed capacity of 445,000 barrels per day.

The refineries have over the years performed far below installed capacity, resulting in huge imports of refined petroleum products into the country.

The refineries, according to the report, lost a total of N68.12bn in the first half of this year, making a profit of N928.81m in April, for the first time in 10 months.

Total crude processed by the refineries in August was 56,804 metric tonnes as against the 90,872MT processed in the preceding month, translating to a combined yield efficiency of 80.74 per cent as against the 73.82 per cent in July.

According to the NNPC, only Warri and Port Harcourt refineries produced 53,881MT of finished petroleum products and 8,017MT of intermediate products out of the 56,804MT of crude processed at a combined capacity utilisation of 3.02 per cent, compared to 4.83 per cent combined capacity utilisation achieved in July.

“The lower operational performance recorded is attributable to the ongoing revamping of the refineries which is expected to further enhance capacity utilisation once completed,” the corporation added.

The corporation also said it had been adopting a merchant plant refineries business model since January 2017.

It said: “The model takes cognisance of the products worth and crude costs. The combined value of output by the three refineries (at import parity price) for the month of August 2018 amounted to N8.67bn while the associated crude plus freight costs and operational expenses were N9.78bn and N9.68bn respectively.”

 

Source: The Ripples

Oil marketers in Nigeria have cried out over the continued delay by the Federal Government in paying subsidy arrears accrued to them.

According to the Major Oil Marketers Association of Nigeria, MOMAN and the Depot and Petroleum Products Marketers Association of Nigeria, DAPPMAN, the delay is impacting negatively on their businesses.

The marketers called on government to facilitate the payment of the debts by the agencies saddled with the responsibility.

It would be recalled that the Senate had approved the request by President Mohammadu Buhari for the payment of subsidy claims amounting to N348 billion to oil companies in July.

Speaking on the issue, the Executive Secretary, MOMAN, Mr Clement Isong, appealed to the government to hasten the payment of the subsidy arrears owed to them, adding that the continued non-payment had severely impacted their working capital and their ability to pay bank loans and their service providers.

He said: “We appreciate the efforts of the National Assembly and the Federal Executive Council in approving payment but the non-payment has a significantly negative impact on the operational efficiency of the downstream sector of the oil industry, thereby placing a severe strain on players’ efforts to continually invest in infrastructure and raise industry standards. We hope that the debts will be paid in full to the oil marketers as soon as possible.”

Isong said the debt owed to MOMAN members alone stood at N130.7bn as of August 2018.

Also speaking, the Executive Secretary, DAPPMAN, Mr Olufemi Adewole, faulted the processes highlighted for payment by the government, saying, they were inimical to the operations of their businesses.

He said: “The processes they have highlighted are killing our businesses. Immediately the banks read in the media that the National Assembly had approved, they went to court, got an injunction and seized our assets.”

According to Adewole, some marketers had been forced out of business as banks had taken over their depots, assets and properties due to their inability to pay back monies borrowed to import fuel, while others were struggling to survive.

“The debt has had very adverse effects on our operations. I am aware of two depots that have been forcibly taken over by banks because they got injunctions from the courts. They did so the moment they heard that the National Assembly approved payment of the debt to marketers. Unfortunately, as of today, the money has yet to get into our accounts,” he added.

 

Source: The Ripples

The Nigerian National Petroleum Corporation (NNPC) has said money alleged to have been diverted from the dividend from the Nigeria Liquefied Natural Gas (NLNG) company was a revolving loan to fund subsidy payments.
 
According to the NNPC, the $1.05bn revolving loan obtained from the dividend of the NLNG prevented petroleum products’ chaos in the country, adding that the loan was used to subsidise the cost of Premium Motor Spirit, popularly known as petrol, in 2018.
 
The corporation also said that it was unfortunate for the National Assembly to commence a probe into the use of the NLNG dividend.
 
It would be recalled that the Senate, on Tuesday, commenced an investigation of the alleged diversion of $1.05bn from the Nigerian Liquefied Natural Gas dividend account by the NNPC.
 
The Group General Manager of NNPC, while commenting on the development on Saturday in Abuja, said the probe by the Senate was wrong as the $1.05bn loan saved Nigeria from chaos.
 
He said: “The Senate got it wrong. Based on newspaper reports, the Senate said it was $3.5bn subsidy fund, whereas we do not have anything like subsidy fund. What we have is that we sourced for revolving loan based on the Nigeria LNG dividend to NNPC.
 
“And this is because NNPC is a major shareholder in NLNG and inter-party agencies are managing this and the figure is $1.05bn. There is nothing like $3.5bn because anything subsidy must be appropriated by the National Assembly.
 
“Now, it is important to state that if we didn’t source for that revolving loan, the nation would have been in chaos. They are not looking at that but claim we spent $3.5bn when there is nothing like that. You can’t place something on nothing.
 
“If we wanted to play safe, we would just appear before the Senate and when they say what of the $3.5bn, we will say nothing like that and that will be all. But for the sake of responsibility, we went further to clarify issues and told them what we have.”
 
Ugbamadu insisted that there would have been crisis across the country if the NNPC had not taken the step.
 
He said further: “So, the investigative panel, set up by the Senate on the Nigeria LNG dividend, is unfortunate because NNPC is the major shareholder and we utilise the dividend paid to the NNPC for importation of products and it is a revolving loan.
 
“Meaning – the NNPC is going to pay it back and if we didn’t obtain that and if the National Assembly has a leeway, it should recommend to the NNPC on what should be done because the price of petrol at N145 per litre is fixed.
 
“Major and independent marketers are not importing and you expect the NNPC to concentrate on the importation of products, which is not our core business! And if that is not done, the entire nation will be in chaos; you and I will be affected, including members of the National Assembly.
 
“It was the same National Assembly that said NNPC should do everything within its reach to ensure that the last fuel challenge is wiped out and that is exactly what we have done.”
 
Ugbamadu however said he could not provide the exact amount the NNPC is currently incurring as ‘under-recovery’ on petrol.
 
“The point is that I don’t have the figures here, but you know it varies depending on the international price of products. Except I source the figures from the PPMC (Pipelines Product Marketing Company).
 
Ughamadu said, “It is for a year. It is for 2018. That is another reason why we are not going to see queues during the Yuletide and beyond because we are augmenting what is imported with our local production. So, Nigeria will not experience fuel shortage this festive period.”The corporation’s spokesperson said it was unfortunate for the Senate to set up an investigative panel on the NLNG dividend as the NNPC controlled the largest stake in the gas company.
 
 
Source: The Ripples
The Nigerian National Petroleum Corporation (NNPC) has said its crude oil and gas export sale in August 2018 was $470 million, indicating an increase of about $78 million when compared with July oil and gas export figures of $391.91 million.
 
In a statement by NNPC Group General Manager, Group Public Affairs, Ndu Ughamadu, the figures were contained in the corporation’s Monthly Financial and Operations report for August 2018 released on Wednesday in Abuja.
 
The report, which is the 37th in the series, indicated that crude oil export sales contributed $337.62 million, representing 71.83 percent of the dollar transactions compared with $283.43 million contribution in the previous month.
 
It stated further that the export gas sales during the period amounted to $132.38 million, adding that the August 2017 to August 2018 crude oil and gas transactions involved crude oil and gas export worth $5.26 billion.
 
The NNPC report explained that based on the above sales figures, a total export receipt of $450.24 million was recorded in August 2018 as receipt against $382.65 million in July 2018.
 
Contribution from crude oil during the period amounted to $336.43 million, while gas and miscellaneous receipt stood at $101.33 million and $12.48 million, according to the report.
 
A further breakdown of the figures showed that out of the export receipts, $142.31million was remitted to the Federation Account, while $307.93 million was remitted to fund the JV cost recovery for the month of August, 2018 to guarantee current and future production.
 
The state-owned oil firm said the total export crude oil & gas receipt for the period August 2017 to August 2018 stood at $5.23 billion out of which $3.74 billion was transferred to JV Cash Call as first line charge and the balance of $1.49 billion paid into the Federation Account.
 
On Naira payments to the Federation Account, the report informed that NNPC transferred N128.40 billion into Account for the month under review. It also explained that from August 2017 to August 2018, the Federation and JV received N879.02 billion and N651.4 billion respectively.
 
Providing insight into the corporation’s remittances to the national treasury, the NNPC explained that the Federation Crude Oil & Gas Revenue, Federation Crude Oil and Gas lifting, are broadly classified into Equity Export and Domestic crude which are lifted and marketed by corporation and the proceeds remitted into the Federation Account.
 
It informed that Equity Export receipts, after adjusting for Joint Venture (JV) Cash Calls, are paid directly into the Federation Account domiciled in Central Bank of Nigeria (CBN).
 
The corporation explained that domestic crude oil of 445,000 barrels per day was allocated for refining to meet domestic products supply, and payments were effected to the Federation Account by NNPC after adjusting crude & product losses and pipeline repairs & management costs incurred during the period.
 
 
Source: The Ripples
The Nigerians National Petroleum Corporation (NNPC) said it transferred the sum of N128.40billion into the federation account in August.
 
The Corporation disclosed this in its monthly Financial and Operational report released in Abuja on Wednesday.
 
It said that between August 2017 and August 2018, the federation and joint ventures (JV) received the sum of N879.02billion and N651.4billion respectively.
 
The NNPC explained that the Federation Crude Oil and Gas Revenue, Federation Crude Oil and Gas lifting, were classified into Equity Export and Domestic crude.
 
It explained that this crude were lifted and marketed by corporation and the proceeds remitted into the Federation Account.
 
It noted that Equity Export receipts, after adjusting for Joint Venture Cash Calls, were paid directly into the Federation Account domiciled in Central Bank of Nigeria (CBN).
 
The corporation explained that domestic crude oil of 445,000 bpd was allocated for refining to meet domestic products supply, and payments were effected to the Federation Account by NNPC.
 
This, it said was done after adjusting crude and product losses and pipeline repairs and management costs incurred during the period.
 
On the crude oil and gas export sales, the report noted that sales for the month of August stood at 470 million dollars.
 
According to the report, the sales indicate an upsurge of about 78million dollars in relation to July oil and gas export figures of 391.91million dollars.
 
It further indicated that crude oil export sales contributed 337.62million dollars which represented 71.83 per cent of the dollar transactions compared with 283.43million dollars contribution in the previous month.
 
“Export gas sales during the period amounted to 132.38million dollars.
 
“The August 2017 to August 2018 crude oil and gas transactions involved crude oil and gas export worth 5.26billion dollars,” it said.
 
The report explained that based on the above sales figures, a total export receipt of 450.24million dollars was recorded in August 2018 as receipt against 382.65million dollars in July 2018.
 
“Contribution from crude oil during the period, amounted to 336.43 million dollars, while gas and miscellaneous receipt stood at 101.33million dollars and 12.48million dollars respectively,” the report noted.
 
A further breakdown of the figures showed that out of the export receipts, 142.31million dollars was remitted to the Federation Account.
 
The sum of 307.93million dollars was remitted to fund the JV cost recovery for the month of August, 2018 to guarantee current and future production.
 
“Total export crude oil and gas receipt for the period August 2017 to August 2018 stood at 5.23billion dollars out of which 3.74 billion dollars was transferred to JV Cash Call as first line charge and the balance of 1.49 billion dollars paid into the Federation Account,” it added.
 
(NAN)
 
The Russian Federation and the United Arab Emirates (UAE) have expressed their readiness to expand their scope of partnership with the Nigerian National Petroleum Corporation (NNPC).
 
In a statement by NNPC Group General Manager, Group Public Affairs Division, Ndu Ughamadu, the corporation said the partnership will be in the upstream, midstream, downstream and services sectors to further boost their various economies.
 
Speaking after a working visit to the Group Managing Director of the NNPC, Maikanti Baru, the Russian Federation Ambassador to Nigeria, Alexey Shebarshin, said the proposed synergy was for the betterment of citizens of both nations.
 
He added that the visit was to consolidate the collaboration and partnership with the state oil firm in ensuring the growth and development of the Nigerian oil and gas industry for collective interests.
 
The statement quoted him as saying, “With deep thanks and appreciation of further cooperation between the Russia Oil and Gas Companies and NNPC that will bring positive results of our joint cooperation.”
 
Shebarshin said the two countries have had a long history and would continue to expand their business interests as part of efforts to improve the standard of living of citizens.
 
Speaking in a similar vein during his courtesy call to Baru, the Ambassador of the United Arab Emirates (UAE), Obaid Mohammed Aitaffag, said his country would continue to partner the corporation in the development of the downstream and services sector of the petroleum industry.
 
“It was a pleasure to meet the NNPC team led by Dr. Baru. I hope that our discussion brings closer ties between UAE and Nigeria in the areas of Oil and Gas,” Aitaffag said.
 
It would be recalled that the Russian Federation, as an oil producing nation, joined other countries that make up the Organization of the Petroleum Exporting Countries (OPEC) in the landmark declaration of cooperation to stabilize global supply of oil to the international market.
 
 
Source: The Ripples
The Nigerian National Petroleum Corporation (NNPC) has debunked media reports about federal government’s plan to review the pump price of petroleum products, particularly Premium Motor Spirit (PMS), otherwise known as Petrol.
 
This was made known on Tuesday in a statement by the corporation’s Group General Manager, Group Public Affairs, Ndu Ughamadu.
 
According to Ughamadu, the federal government has no plan to review prices of the products either upwards or downwards.
 
The NNPC spokesperson explained that the corporation had been the sole importer of PMS into the country as a result of Open Market Price being much higher than the N145 per litre official selling price.
 
He warned rumour mongers to desist from spreading false information, adding that such act could negatively impact on the prices of petroleum products especially petrol as the festive period draws near.
 
He hinted that the misinformation could lead to scarcity and hoarding of the products by consumers, resulting to unwarranted queues at fuel stations.
 
Ughamadu assured that the strategies being mapped out by NNPC General Managing Director, Maikanti Baru, would ensure that Nigerian have a hitch-free festive season.
 
Recall that the Minister of State for Petroleum Resources, Ibe Kachikwu, had in May 2016 announced an upward review of PMS pump price by the Federal Government from N86.50 to N145.00, and directed filling stations across the country not to sell the product above the fixed price.
 
The minister had said the hike was the only way out of the exorbitant prices of N150 to N250 Nigerians were subjected to at many filling stations across the country during yuletide.
 
 
 
 Source: The Ripples
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