Indiscriminate allocation of oil blocs in Nigeria dates back during the regime of General Ibrahim Babangida when he, Babangida, started the process of discretionary allocation of oil blocs
to indigenous firms. Discretionary allocation of oil blocs entails that a president or head of state (as the case may be) can reward a mistress with an oil bloc with capacity for cumulative yield of over $20 billion dollars without much sweat. Babangida, Abacha, Abdulsalami and Obasanjo awarded discretionary oil blocs to friends, associates, family members, party chieftains, security chiefs and all categories of close allies with wanton disregard for any procedures.
It is worthy to note that, recipients of such oil blocs will get funds from ever willing offshore financiers and partners to graciously settle the benefactors, the awarders, facilitators and the Commander-in-Chief through fronts. These settlements mostly paid into foreign accounts runs into hundreds of millions of dollars according to the potential yield of the bloc.
Sometimes, the awarder (sharer of national cake and direct intermediaries) demand additional stakes in the bidding company. The awarder sends fronts as part of the directorship and management of the bidding firms without leaving a link to them. That is how the oil bloc national cake is distributed to a few Nigerians. This is largely how Folorunsho Alakija made so much money to become the richest black woman in the world, with so much money to make Oprah Winfrey second after her.
According to what can be referred to as a hagiography by Ventures Africa, a largely unknown monthly Pan-African business magazine. The magazine describes her as a "billionaire oil tycoon, Fashion designer and philanthropist". How did Alakija go from Babangida's clothier and hair dresser to "billionaire oil tycoon" with an alleged net worth of $3.3 billion dollars? Well, that's where Ventures Africa's carefully written hagiography starts to break down.
"In May 1993 Alakija applied for an allocation of an Oil Prospecting License (OPL). The license to explore for oil on a 617,000 acre block – (now referred to as OPL 216) was granted to Alakija's company, Famfa Limited. The bloc is located approximately 220 miles South East of Lagos and 70 miles offshore Nigeria in the central Niger Delta".
She was awarded a license by the Federal Government to explore for oil on a 617,000 acre bloc in the Niger Delta. Her known qualifications for the award of a 617,000 acre oil bloc were essentially that she made really nice clothes for Maryam Babangida.
"This was in 1993. Many wealthy Nigerian businessmen and military bigwigs who had been allocated oil blocs by the military administration at the time had no clue as to the technicalities in operating an oil bloc, so many of them typically acquired OPLs, and then flipped them off to international oil companies for substantial profits. But Alakija decided not to sell off her license.
She had no expertise or experience to even operate a Palm oil business talk less of running an oil field. In September 1996, she entered into a joint venture agreement with Star Deep Water Petroleum Limited (a wholly-owned subsidiary of Texaco) and appointed the company as a technical adviser for the exploration of the license, transferring 40 percent of her 100 percent stake to Star Deep. Subsequently, Star Deep sold off 8 percent of its stake in OPL 216 to Petrobas, a Brazilian company. Folorunsho Alakija and her family owned 60 percent."
Alakija had no expertise or experience running an oil field. This is the most important thing you need to know about 'the richest black woman in the world'. She had no expertise or experience doing the thing from which she became stupendously and improbably rich. Alakija was not qualified to be awarded a license to produce palm oil, much less crude oil. Ventures Africa won't say it but the truth is Folorunsho Alakija is allegedly worth $3.3 billion dollars because Ibrahim Babangida's wife's favourite fashion designer somehow acquired a 617,000 acre oil bloc now worth $3.3 billion dollars of Nigeria's money.
The relationship between Folorunsho Alakija, the richest black woman in the world and Late Mariam Babangida as widely held, was the reason why the Company, Famfa Oil Limited owned by Alakija, was awarded the leasehold rights to OPL 216 on August 10, 1993. Alakija was not qualified to be awarded a license to operate oil field, the truth is Alakija is allegedly worth $3.3 billion dollars because she was Ibrahim Babangida's wife's favourite hair dresser and fashion designer, she, Alakija, somehow this was how she acquired a 617,000 acre oil bloc now worth $3.3 billion dollars of our common wealth. If this is not outrageous then, I don't know what is. In September 1996, she entered into an agreement with Star Deep Water Petroleum Limited and appointed the company as a technical adviser for the exploration of the license, transferring 40percent of her 100percent stake to Star Deep. Subsequently, Star Deep sold off 8 percent of its stake in OPL 216 to Petrobas, a Brazilian company. Folorunsho Alakija and her family owned 60 percent.
Let's go further, Signature bonuses which are paid when an investor successfully bids, wins and signs agreement with the petroleum ministry, running into tens of millions and sometimes hundreds of millions of naira, is often waived off. There is actually no waiver; rather a diversion of what would have been paid to government coffers is paid into private purse as appreciation gifts. That is why those in the Petroleum Ministry dread retirement as though it signifies going to hell fire. No matter how little your influence, something substantial must enter your hands especially in hard currency. This was how Folorunsho Alakija became the richest black woman for doing nothing and knowing nothing in an industry she knew nothing about.