Tuesday, 21 July 2015
Phantoms of the country! Buhari disgraces CBN gov, Godwin Emefiele, Jim Ovia, Tony Elumelu, Wale Tinubu in America
· What are you guys doing here...Did I invite you people? - Buhari
By Femi Ajayi
Time was, when phantoms in scarlet persistently passed as men of honour while the righteous faded in obscurity or lay spent in trenches of blood. Hence it was no surprise that Nigerian businessmen, Jim Ovia, Tony Elumelu, Wale Tinubu and Godwin Emefiele, Governor of the Central Bank of Nigeria (CBN), in desperate bid to dig their claws into President Muhammadu Buhari, bought first class tickets and flew after him to the United States of America.
But the snag was, they were uninvited; even so, they embarked on a desperate quest to establish themselves as Nigeria's top businessmen and cronies of the incumbent president. Back when Goodluck Jonathan was president, they would have gotten away with such brazen disregard for protocol; in fact, they would have constituted a crucial part of the former president's travel plans. But a new sheriff is in town and the businessmen are yet to get with his programme.
Thus they had sheepishly gone to attend a meeting with Buhari in America and Buhari on sighting them reportedly asked, "My friends, what are you doing here? Did I invite you people? You are not needed here," Buhari allegedly told them. Shamefacedly, they gathered their folders and left the meeting. Their steps became very heavy as they trudged out of the venue.
It was indeed a big disgrace to these businessmen who once formed a ring around the former President Jonathan. They quietly left the venue with their tails and gargantuan pride tucked between their legs.
All around the world, presidential politics has always been a game of the wealthy, for the wealthy and by the wealthy. Men of means have always had a say and in several instances, determined the course of political and socioeconomic affairs in the country. This becomes imperative in their desperate bid to establish their dominance and affluence sustainably. The need to maintain their controlling grip on their country's economy, rather than ensuring that the nation's commonwealth is equitably distributed has always been the only ideological and selfish motive driving their political participation.
Consequently, the superrich of the nation's high society are continually seen as the arrowheads of plots and movements to institute and sustain political hegemony via a puppet leader or party. Political pundits are of the opinion that the President Buhari needs to stay away from these men and women who have perfected the knack for soiling the hands of any President and sullying the his administration by their self-serving pursuits which often manifests devastatingly on the lot of the citizenry and to the detriment of the country.
Two APC Reps sue Dogara over leadership crisis
John Ameh, Abuja
Joined in suit number FHC/ABJ/CS/625/2015, filed at the Federal High Court, Abuja, are the Deputy Speaker, Mr. Yusuf Lasun; and the Clerk to the House, Mr. Mohammed Sani-Omolori.
The members, Mr. Abubakar Lado-Abdullahi from Niger State; and Mr. Olajide Abdul-Jimoh from Lagos State, are praying the court to restrain the defendants from stopping the announcement of the names of principal officers recommended by the leadership of the APC.
In their prayers, the members argued, “it is an indisputable fact that the positions in question are party positions; that is, principal offices of the APC, albeit that they concomitantly are also principal positions within the House of Representatives.
“Consequently, the 1st and 2nd Defendants (Speaker and Deputy Speaker) shall in accordance with Article 9.2 of APC Constitution, which states, ‘members of the party shall be obligated to affirm the party’s aims and objectives’, implement the party’s aims as contained in the party’s nomination letter’.”
Findings showed that the court process was reportedly served on Dogara and the co-defendants on July 16.
A copy of the process was made available to The PUNCH about 5.26pm on Tuesday.
Specifically, the plaintiffs urged the court to determine whether Section 14 of the 1999 Constitution, dealing with the Principle of Federal Character, was applicable to the sharing of principal offices in the National Assembly.
However, when The PUNCH sought the reactions of the Speaker’s office on Tuesday, it got a “not aware” response.
His Special Adviser on Media and Public Affairs, Mr. Hassan Turaki, simply said “not aware” in a reply to a question whether Dogara had received the court’s summons.
He declined to respond to a second question what the speaker would do about the case.
The House, which began a forced break on June 25 after fighting broke out on the floor over the sharing of the principal offices, was scheduled to resume on Today(Tuesday).
But, on Friday last week, the resumption was suddenly put off by one week without any official explanations.
However, findings indicated that the unresolved leadership tussle was the reason for the abrupt postponement of resumption.
PRESIDENT BUHARI HAILS WORLD BANK'S DECISION TO SPEND $2.1 BILLION IN REBUILDING NORTH-EAST
The World Bank has unfolded a package which would see it spending up to $2.1 billion in rebuilding the badly devastated North-eastern part of Nigeria, ravaged for the past six years by the Boko Haram insurgency.
At a meeting in Washington today with representatives of the World Bank, the Bill and Melinda Gates Foundation, and the World Health Organization (WHO), President Buhari said apart from rebuilding the region in terms of infrastructure, priority must also be given to the resettlement of internally displaced persons (IDPs), who now number over one million.
He urged the World Bank to send a team, which would work in concert with a team from the Federal Government, so that a proper assessment of needs could be done.
The World Bank will spend the 2.1 billion dollars through its IDA (International Development Agency), which gives low interest rates loans to government. The first 10 years will be interest free, while an additional 30 years will be at lower than capital market rate.
The World Bank is eager to move in quickly, give out the loans, and give succor to the people of North-east, long at the mercy of an insurgency that has claimed over 20,000 souls.
WHO is also to invest 300 million dollars on immunization against malaria in Nigeria, while the Bill and Melinda Gates Foundation will collaborate with Dangote Foundation to ensure that the country maintains its zero polio case record of the past one year. If the effort is sustained for another two years, Nigeria will be declared fully free of polio.
FEMI ADESINA
SPECIAL ADVISER, MEDIA AND PUBLICITY
JULY 21,2015
How U.S. will help Nigeria recover loot, fight corruption – Presidency
Muhammadu Buhari in handshake with Barack Obama
The United States government has agreed to assist Nigeria recover all identified ill-gotten wealth within the U.S., and from other nations where it has jurisdiction, the Nigerian presidency said Tuesday.
The American government will also train Nigerian judicial staff and prosecutors as part of efforts to tackle corruption in Nigeria.
The assurances emerged from a meeting between President Muhammadu Buhari and the United States Attorney-General, Loretta Lynch, on the subject of support for the war on corruption in Nigeria.
A statement by Mr. Buhari’s spokesperson, Garba Shehu, said the two nations agreed that the Mutual Legal Assistance Treaty signed between the two countries in 1985 which came into effect in 2003 be given some teeth.
“There will be collaboration. Each of the two countries will receive legal assistance from the other on criminal matters and that should cover the recovery of ill-gotten wealth. On extradition, we already have a treaty with U.S. By virtue of being a former British colonial territory,” the statement said.
“There is however the possibility that Nigeria might negotiate a new extradition treaty to meet our other requirements. The negotiation will be done under the auspices of a ‘reenergized’ U.S-Nigeria Bi-National Commission.”
President Buhari is on a four-day official visit to the U.S. He met with President Barack Obama and Vice President Joe Biden on Monday.
Mr. Biden assured of the goodwill of his country in rebuilding the Nigerian economy, but observed that corruption and weak institutions must be tackled, if Nigeria was to benefit from reforms.
He advised President Buhari to appoint only seasoned technocrats to manage key sectors of the Nigerian economy.
The American government will also train Nigerian judicial staff and prosecutors as part of efforts to tackle corruption in Nigeria.
The assurances emerged from a meeting between President Muhammadu Buhari and the United States Attorney-General, Loretta Lynch, on the subject of support for the war on corruption in Nigeria.
A statement by Mr. Buhari’s spokesperson, Garba Shehu, said the two nations agreed that the Mutual Legal Assistance Treaty signed between the two countries in 1985 which came into effect in 2003 be given some teeth.
“There will be collaboration. Each of the two countries will receive legal assistance from the other on criminal matters and that should cover the recovery of ill-gotten wealth. On extradition, we already have a treaty with U.S. By virtue of being a former British colonial territory,” the statement said.
“There is however the possibility that Nigeria might negotiate a new extradition treaty to meet our other requirements. The negotiation will be done under the auspices of a ‘reenergized’ U.S-Nigeria Bi-National Commission.”
President Buhari is on a four-day official visit to the U.S. He met with President Barack Obama and Vice President Joe Biden on Monday.
Mr. Biden assured of the goodwill of his country in rebuilding the Nigerian economy, but observed that corruption and weak institutions must be tackled, if Nigeria was to benefit from reforms.
He advised President Buhari to appoint only seasoned technocrats to manage key sectors of the Nigerian economy.
Inside the oil deals that cost Nigeria billions
Despite elaborate efforts to sweep it under the carpet, facts have shown that a strategic alliance agreement between the Nigerian Petroleum Development Company (NPDC) and Atlantic Energy Drilling Concepts Nigeria Limited Limited (AEDCNL) has helped parties in the agreement to swindle the country. After wide-ranging investigations, Assistant Editor ADEKUNLE YUSUF uncovers the details of the deal that set back the country by about $2b
It is an adventure laced with shoddiness. That perhaps is the most fitting silhouette for the Strategic Alliance Agreement (SAA) between the Nigerian Petroleum Development Company (NPDC) and Atlantic Energy Drilling Concept Nigeria Limited. From all available documentary evidence, the SAA, which paved the way for Atlantic Energy to operate some oil blocks during the administration of former President Goodluck Jonathan, has left the country short-changed of about $2billion, excluding hundreds of millions of dollars as bank loans and money owed to workers and contractors. After four years of the alliance, everything suggests that NPDC and Atlantic Energy owe Nigerians a lot of explanations regarding how some oil blocks – OMLs 26, 30, 34, 42, 60, 61, 62 and 63 – were handled between 2011 and 2014, including outright theft of proceeds from all the millions of barrels of crude oil lifted during in the four years.
A portfolio company
Like a well-choreographed movie, it all started on a measured pace. On July 19, 2010, Atlantic Energy Drilling Concept Limited (AEDCNL) was incorporated as a portfolio company. That was barely three months after Mrs Diezani Alison-Madueke, former Minister of Petroleum Resources, assumed office after her redeployment from Mines and Steel Development Ministry. Curiously, the company changed its name to Atlantic Energy Drilling Concepts Nigeria Limited (AEDCNL) on October 27, 2011. However, Atlantic Energy, even without prior record of successful experience in the oil and gas sector, announced that it had entered into a Strategic Alliance Agreement (SAA) with the Nigerian Petroleum Development Company (NPDC) in April 2011. That was exactly six months before AEDCNL was legally born. In a capsule, the company that claimed to have signed the SAA with NPDC was not legally in existence when the deal was shoddily consummated in April 2011. As unknown portfolio company, Atlantic Energy was operating from a temporary office accommodation before it opened office in 2012 at 32a Adetokunbo Ademola Street, Victoria Island, Lagos, after the NPDC fortune had smiled on it. With the NPDC contract in its kitty, Atlantic Energy embarked on a massive recruitment exercise, poaching good hands in the oil industry, which it used to actualise its planned scheme to play big in Nigeria’s highly shady oil and gas sector.
But all that never dissuaded partners in the deal from embarking on a hot business romance at the expense of the country. The SAA covered 4 Oil blocks: OML 26 – FHN; OML 30 Shoreline; OML 34 – Niger Delta Oil, and OML 42 Neconde, all sold by Shell /Agip and Total. It was obvious that the NPDC granted the SAA in absolute secrecy without following any due process as stipulated in the government procurement laws and policy. With the sale of the four oil blocks, in which the Federal Government owns 55 per cent, the National Petroleum Investment Management Services (NAPIMS), which oversees national investments in Joint Venture Companies (JVCs), Production Sharing Companies (PSCs), and Services and Services Contract Companies (SCs), transferred the ownership to NPDC as the upstream producing arm of the NNPC. Although the NPDC should have paid NAPIMS a signature bonus, no payment was made, leading to a loss of asset by the federation and loss of revenue that should have accrued to national coffers. This was confirmed by the recent PwC audit report, which audited remittances from NNPC to the Federation Account after the allegations by Sanusi Lamido Sanusi, former governor of the Central Bank of Nigeria (CBN) who is now the emir of Kano. The audit findings showed that remittances into the Federation Account were not up to date.
An unholy alliance?
The SAA is to enable Atlantic Energy provide fund and technical services and lift oil. Being a funding mechanism, the SAA is meant to enable the owner (NPDC) to accept its strategic partner (Atlantic Energy) to partake in the production sharing of the oil field at a fee called signature bonus, while the strategic partner is expected in return to fund the operations and provide technical support so that it can be reimbursed directly from the production in subsequent periods. Although a good idea that is said to be critical to the survival of the country’s oil and gas industry, the SAA was obviously not managed in the national interest, for it has helped parties in the deal to embark on a stealing spree of public fund after production liftings.
Up till now, industry watchers are still in a shock over how NPDC, which is peopled with some of the best engineers and technical experts, granted the SAA to a company that paraded no track record of requisite experience in the sector – all without following any process as stipulated in the government procurement laws and policy. Besides documentary evidence, findings within the sector showed that the deal was an unholy arrangement between Alison-Madueke, top NPDC officials and the duo of Kola Aluko, who is a known business ally of the ex-Minister, and Jide Omokore, a controversial business mogul who is a Peoples Democratic Party (PDP) stalwart, financier and kingmaker to some governors as well as many senators and members in the House of Representatives. Aluko and Mrs Alison-Madueke have denied any business ties.
Of the two promoters of Atlantic Energy, Omokore had no easily traceable previous experience in the oil and gas industry, while Aluko had.
However, drawing on its connections in high places, Atlantic Energy swung into plum business, having won the hearts of those at the helms of affairs – from the ministry and the Presidency. As contained in the SAA document, Atlantic Energy was supposed to pay a signature bonus of $245 million to NPDC, but it ended up paying $135 million – no thanks to legal terminology and simple mathematics that only parties in the deal could explain. The balance was remitted to the account of unknown people.
Inside the raw deals
Atlantic Energy approached two Nigerian banks for loans. Going by the books of Atlantic Energy, the loans were meant for the payment of signature bonus and cash calls to NPDC. Therefore, in 2011, it took a loan of $490million, with First Bank contributing $370million and Skye Bank $120million. At the beginning of the deal, Atlantic Energy actually paid the signature bonus of $135 and cash calls of $68 to NPDC from the loan, totalling $203 million out of $490million lifeline provided by the two banks.
But another weighty, if not damning evidence that was to expose the shoddiness of the SAA came in the early life of the deal. In 2011, shortly after securing the juicy contract, it was NPDC that lifted crude oil (947,096 barrels) on behalf of Atlantic Energy and remitted $102m into the coffers of its strategic partner; instead of Atlantic Energy to lift oil and remit proceeds. Why? It was because Atlantic Energy, a mere portfolio company at the time it was handed the sweetheart contract, was still too new and untested to even secure an export permit for such a venture as at the time, thus showing the level of involvement of the top echelons of the Petroleum Ministry and NPDC officials.
A detailed scrutiny of the cash calls schedules and other papers also showed that the plundering galore continued till 2012 and 2013. For example, in 2012 alone, Atlantic Energy paid cash calls worth $168m, but lifted crude oil of about 3million barrels valued, conservatively at over $350 million. Despite the differentials in remittances, NPDC continued to look the other way as Atlantic Energy lifted about 2million barrels of crude oil in 2013, valued at about $240million, but paid cash calls of $68million. In 2014, records also revealed that Atlantic Energy paid zero cash calls and lifted about 500,000 barrels of crude oil, valued at $54 million, with all the funs siphoned abroad as payments for vendors sources say are phony.
Again, the promoters incorporated the Atlantic Brass Development Company Limited on February 5, 2013. As usual, it was hurriedly granted another set of SAA. The SAA covered another set of 4 blocks: OML – 60; OML – 61; OML – 62; OML – 63. Unlike in the previous deals in 2011 and 2012, when it paid a fraction of obligatory funds, the company simply pocketed all the proceeds, paying pay no signature bonus or any cash calls at all despite lifting about 8 million barrels of crude oil, valued at $800 million at the time. Instead various amounts of money were transferred to the accounts and investment companies in UK, Dubai and Switzerland. They also opened mirror accounts of Atlantic Energy Brass in the UK and Switzerland (see the table on foreign accounts).
However, with the fall of the administration of Jonathan, the chicken seemed to have come home to roost, as the NPDC, which seemed to have condoned all the infractions of its strategic partner, has suddenly woken from slumber. In a letter from NPDC, dated May 6, Atlantic Energy was asked to pay its outstanding indebtedness OMLs 26, 30, 34, and 42, totalling $573,668,090 (five hundred and seventy three million, six hundred and sixty eight thousand, ninety dollars).
“This is to inform you that we have not yet received any payment on outstanding cash call obligations after our reconciliation sign-off, dated August 28, last year. Kindly remit the sum of $573,668,090 (five hundred and seventy three million, six hundred and sixty eight thousand, ninety dollars) only, being amount due to OMLs 26, 30, 34, and 42,” said the NPDC.
An analysis of the reconciliation sheet revealed that the $573,668,090 was just a fraction of the cash calls, as some huge returns that were yet to be subjected to technical and financials by the two parties were not included.
But the bad state of finances on OMLs 26, 30, 34, and 42 paled when compared with that on OMLs 60, 61, 62 and 63 where Atlantic Energy owes NPDC a staggering $1,250,644,474.54 (one billion, two hundred and fifty million, six hundred and forty four thousand, four hundred and seventy four dollars).
In another letter from NPDC, dated May 6, Atlantic Energy was reminded of its outstanding indebtedness.
“This is to inform you that we have not yet received any payment outstanding cash call obligations after our reconciliation sign-off, dated August 28, 2014. Kindly remit the sum of $1,250,644,474.54 (one billion, two hundred and fifty million, six hundred and forty four thousand, four hundred and seventy four dollars) only, being amount due on OMLs 60, 61, 62 and 63,” the letter said.
Atlantic Energy has also defaulted on the bank loans from First Bank Plc and Skye Bank. Instead of moving the proceeds of the liftings to the two banks to repay the loans and pay the obligatory cash calls, Atlantic Energy has transferred the funds through various related party companies. As at now, the loans have not been paid while the mounting interest element is also long overdue.
In a letter from Skye Bank, dated April 10, Atlantic Energy was reminded of repayment its outstanding obligations ($39,232,428.16) on the $120 million loan facility it took from the bank.
“Kindly refer to our various correspondence and discussions regarding your outstanding obligations on the above subject facility ($120 million). This is to remind you that the total sum of $39,232,428.16 plus accrued interest is past overdue for payment on your facility,” the letter said.
The letter was signed by Tutu Alu, manager, corporate banking group, and Tosin Faniro-Dada, relationship officer, corporate banking group.
Another letter from First Bank, dated February 20, tacitly refused a request from Atlantic Energy seeking to restructure the loan facilities it has received from the bank, hinging it on some stringent conditions.
“We refer to the meeting held on 19th February 2015 and your request for a restructure of your facilities coupled with lenders’ consent to change the ownership structure of Atlantic Energy. We wish to state that, even as we are mindful of the set timeline, we are constrained to progress your request further until we receive the following documents: (1) copy of the executed NPDC/Atlantic Energy reconciliation, (2) copy of executed NPDC repayment plan, (3) addendum to the SAA, (4) NPDC consent to the restructure of the company.”
The FBN letter also included the following conditions that must be met before considering Atlantic Energy’s request: “provision of standby Letter of LC to secure crude oil liftings, and payment of all overdue obligations, coupled with the injection of $100 million to reduce exposure to lenders.”
The letter was signed by Deji Abisola, business manager, corporate banking group (energy and utilities), and Jide Ayeronwi, group head, corporate banking group, (energy and utilities).
Also, in spite of the billions of dollars it has enjoyed over the years, Atlantic Energy has not filed its accounts with the Federal Inland Revenue Service (FIRS) as stipulated by law. Using an influential lawyer, who sources said is the company’s legal backbone, Atlantic Energy has continued to hold on to the legal advice that it is not liable to tax.
In a letter from FIRS, dated February 17 , Atlantic Energy was warned of the consequences of its refusal to submit the accounts and returns within the next ten days. It was signed by the duo of Okeowo Taiwo, and Ocheja E.F., FIRS’ manager (tax) and deputy manger (tax) respectively.
It reads: “It is worrisome to note that we are yet to receive the draft accounts/returns as promised. Let me remind you that the accounts/returns are long overdue for submission. You are advised to submit the accounts/returns within 10 days from the date of receiving this letter, failing which FIRS shall enforce compliance with the relevant tax laws.”
Transfers, cash withdrawals
Sadly, a company that could not meet its financial obligations was on a spending binge, with its directors living ostentatiously (owing private jets and armoured jeeps) and transferring huge sums – sometimes in billions and millions of naira and dollars – into accounts of both local and foreign organisations. And if the local transfers raised some red flags, so were the numerous transfers of millions to foreign accounts (see a table on foreign accounts) of Expedia Marine Company Limited, Energy Property Development Ltd, Petrochemicals Offshore, SPOG Petrochemicals Limited, Premium Aviation Services Ltd, Ibalex Nigeria Limited, and numerous others, where funds were paid at different times.
Interestingly, Atlantic Energy is enmeshed in huge debts – albeit self-imposed. But it seems the embattled company is not ready to go down alone. Not only has it closed its office, it also did not pay its staff for more than one year. It has equally defaulted in the payment of workers’ pension and PAYEs, leading to a mass resignation crisis that swept the company even before it closed its shop recently. Even business partners were not left out, as Atlantic Energy, which kept booking flight tickets and enjoying services from international and reputable companies, did not meet its obligations to its numerous clients, wrecking havoc on several businesses. Now, Atlantic Energy owes NPDC about $2billion, banks $550million, workers $5million, and other vendors $20million. This explains why the banks as well as NPDC appear helpless, as Atlantic Energy is frantically looking for investors to buy the company and the massive debts to boot.
The Nation learnt that the promoters of Atlantic Energy are negotiating a soft-landing with some people that are very close to the corridors of power with a view to refunding a paltry amount. Their stratagem is to sway the new administration to avoid the “unnecessary controversies” that a probe may generate so that they can be asked to go and sin no more. As part of a grand strategy to achieve their objective, some foot soldiers have been enlisted, including some highly-placed Nigerians, to reach out to President Muhammadu Buhari to strike a deal on their behalf, fearing that any inquiry into the books of NPDC and other agencies in the highly opaque oil and gas sector will most likely unearth a can of worms. Will President Buhari, who is widely revered as an incorruptible man, allow them to walk away free after what seems like clear financial crimes against the country? Time will tell
It is an adventure laced with shoddiness. That perhaps is the most fitting silhouette for the Strategic Alliance Agreement (SAA) between the Nigerian Petroleum Development Company (NPDC) and Atlantic Energy Drilling Concept Nigeria Limited. From all available documentary evidence, the SAA, which paved the way for Atlantic Energy to operate some oil blocks during the administration of former President Goodluck Jonathan, has left the country short-changed of about $2billion, excluding hundreds of millions of dollars as bank loans and money owed to workers and contractors. After four years of the alliance, everything suggests that NPDC and Atlantic Energy owe Nigerians a lot of explanations regarding how some oil blocks – OMLs 26, 30, 34, 42, 60, 61, 62 and 63 – were handled between 2011 and 2014, including outright theft of proceeds from all the millions of barrels of crude oil lifted during in the four years.
A portfolio company
Like a well-choreographed movie, it all started on a measured pace. On July 19, 2010, Atlantic Energy Drilling Concept Limited (AEDCNL) was incorporated as a portfolio company. That was barely three months after Mrs Diezani Alison-Madueke, former Minister of Petroleum Resources, assumed office after her redeployment from Mines and Steel Development Ministry. Curiously, the company changed its name to Atlantic Energy Drilling Concepts Nigeria Limited (AEDCNL) on October 27, 2011. However, Atlantic Energy, even without prior record of successful experience in the oil and gas sector, announced that it had entered into a Strategic Alliance Agreement (SAA) with the Nigerian Petroleum Development Company (NPDC) in April 2011. That was exactly six months before AEDCNL was legally born. In a capsule, the company that claimed to have signed the SAA with NPDC was not legally in existence when the deal was shoddily consummated in April 2011. As unknown portfolio company, Atlantic Energy was operating from a temporary office accommodation before it opened office in 2012 at 32a Adetokunbo Ademola Street, Victoria Island, Lagos, after the NPDC fortune had smiled on it. With the NPDC contract in its kitty, Atlantic Energy embarked on a massive recruitment exercise, poaching good hands in the oil industry, which it used to actualise its planned scheme to play big in Nigeria’s highly shady oil and gas sector.
But all that never dissuaded partners in the deal from embarking on a hot business romance at the expense of the country. The SAA covered 4 Oil blocks: OML 26 – FHN; OML 30 Shoreline; OML 34 – Niger Delta Oil, and OML 42 Neconde, all sold by Shell /Agip and Total. It was obvious that the NPDC granted the SAA in absolute secrecy without following any due process as stipulated in the government procurement laws and policy. With the sale of the four oil blocks, in which the Federal Government owns 55 per cent, the National Petroleum Investment Management Services (NAPIMS), which oversees national investments in Joint Venture Companies (JVCs), Production Sharing Companies (PSCs), and Services and Services Contract Companies (SCs), transferred the ownership to NPDC as the upstream producing arm of the NNPC. Although the NPDC should have paid NAPIMS a signature bonus, no payment was made, leading to a loss of asset by the federation and loss of revenue that should have accrued to national coffers. This was confirmed by the recent PwC audit report, which audited remittances from NNPC to the Federation Account after the allegations by Sanusi Lamido Sanusi, former governor of the Central Bank of Nigeria (CBN) who is now the emir of Kano. The audit findings showed that remittances into the Federation Account were not up to date.
An unholy alliance?
The SAA is to enable Atlantic Energy provide fund and technical services and lift oil. Being a funding mechanism, the SAA is meant to enable the owner (NPDC) to accept its strategic partner (Atlantic Energy) to partake in the production sharing of the oil field at a fee called signature bonus, while the strategic partner is expected in return to fund the operations and provide technical support so that it can be reimbursed directly from the production in subsequent periods. Although a good idea that is said to be critical to the survival of the country’s oil and gas industry, the SAA was obviously not managed in the national interest, for it has helped parties in the deal to embark on a stealing spree of public fund after production liftings.
Up till now, industry watchers are still in a shock over how NPDC, which is peopled with some of the best engineers and technical experts, granted the SAA to a company that paraded no track record of requisite experience in the sector – all without following any process as stipulated in the government procurement laws and policy. Besides documentary evidence, findings within the sector showed that the deal was an unholy arrangement between Alison-Madueke, top NPDC officials and the duo of Kola Aluko, who is a known business ally of the ex-Minister, and Jide Omokore, a controversial business mogul who is a Peoples Democratic Party (PDP) stalwart, financier and kingmaker to some governors as well as many senators and members in the House of Representatives. Aluko and Mrs Alison-Madueke have denied any business ties.
Of the two promoters of Atlantic Energy, Omokore had no easily traceable previous experience in the oil and gas industry, while Aluko had.However, drawing on its connections in high places, Atlantic Energy swung into plum business, having won the hearts of those at the helms of affairs – from the ministry and the Presidency. As contained in the SAA document, Atlantic Energy was supposed to pay a signature bonus of $245 million to NPDC, but it ended up paying $135 million – no thanks to legal terminology and simple mathematics that only parties in the deal could explain. The balance was remitted to the account of unknown people.
Inside the raw deals
Atlantic Energy approached two Nigerian banks for loans. Going by the books of Atlantic Energy, the loans were meant for the payment of signature bonus and cash calls to NPDC. Therefore, in 2011, it took a loan of $490million, with First Bank contributing $370million and Skye Bank $120million. At the beginning of the deal, Atlantic Energy actually paid the signature bonus of $135 and cash calls of $68 to NPDC from the loan, totalling $203 million out of $490million lifeline provided by the two banks.
But another weighty, if not damning evidence that was to expose the shoddiness of the SAA came in the early life of the deal. In 2011, shortly after securing the juicy contract, it was NPDC that lifted crude oil (947,096 barrels) on behalf of Atlantic Energy and remitted $102m into the coffers of its strategic partner; instead of Atlantic Energy to lift oil and remit proceeds. Why? It was because Atlantic Energy, a mere portfolio company at the time it was handed the sweetheart contract, was still too new and untested to even secure an export permit for such a venture as at the time, thus showing the level of involvement of the top echelons of the Petroleum Ministry and NPDC officials.
A detailed scrutiny of the cash calls schedules and other papers also showed that the plundering galore continued till 2012 and 2013. For example, in 2012 alone, Atlantic Energy paid cash calls worth $168m, but lifted crude oil of about 3million barrels valued, conservatively at over $350 million. Despite the differentials in remittances, NPDC continued to look the other way as Atlantic Energy lifted about 2million barrels of crude oil in 2013, valued at about $240million, but paid cash calls of $68million. In 2014, records also revealed that Atlantic Energy paid zero cash calls and lifted about 500,000 barrels of crude oil, valued at $54 million, with all the funs siphoned abroad as payments for vendors sources say are phony.
Again, the promoters incorporated the Atlantic Brass Development Company Limited on February 5, 2013. As usual, it was hurriedly granted another set of SAA. The SAA covered another set of 4 blocks: OML – 60; OML – 61; OML – 62; OML – 63. Unlike in the previous deals in 2011 and 2012, when it paid a fraction of obligatory funds, the company simply pocketed all the proceeds, paying pay no signature bonus or any cash calls at all despite lifting about 8 million barrels of crude oil, valued at $800 million at the time. Instead various amounts of money were transferred to the accounts and investment companies in UK, Dubai and Switzerland. They also opened mirror accounts of Atlantic Energy Brass in the UK and Switzerland (see the table on foreign accounts).However, with the fall of the administration of Jonathan, the chicken seemed to have come home to roost, as the NPDC, which seemed to have condoned all the infractions of its strategic partner, has suddenly woken from slumber. In a letter from NPDC, dated May 6, Atlantic Energy was asked to pay its outstanding indebtedness OMLs 26, 30, 34, and 42, totalling $573,668,090 (five hundred and seventy three million, six hundred and sixty eight thousand, ninety dollars).
“This is to inform you that we have not yet received any payment on outstanding cash call obligations after our reconciliation sign-off, dated August 28, last year. Kindly remit the sum of $573,668,090 (five hundred and seventy three million, six hundred and sixty eight thousand, ninety dollars) only, being amount due to OMLs 26, 30, 34, and 42,” said the NPDC.
An analysis of the reconciliation sheet revealed that the $573,668,090 was just a fraction of the cash calls, as some huge returns that were yet to be subjected to technical and financials by the two parties were not included.
But the bad state of finances on OMLs 26, 30, 34, and 42 paled when compared with that on OMLs 60, 61, 62 and 63 where Atlantic Energy owes NPDC a staggering $1,250,644,474.54 (one billion, two hundred and fifty million, six hundred and forty four thousand, four hundred and seventy four dollars).
In another letter from NPDC, dated May 6, Atlantic Energy was reminded of its outstanding indebtedness.
“This is to inform you that we have not yet received any payment outstanding cash call obligations after our reconciliation sign-off, dated August 28, 2014. Kindly remit the sum of $1,250,644,474.54 (one billion, two hundred and fifty million, six hundred and forty four thousand, four hundred and seventy four dollars) only, being amount due on OMLs 60, 61, 62 and 63,” the letter said.Atlantic Energy has also defaulted on the bank loans from First Bank Plc and Skye Bank. Instead of moving the proceeds of the liftings to the two banks to repay the loans and pay the obligatory cash calls, Atlantic Energy has transferred the funds through various related party companies. As at now, the loans have not been paid while the mounting interest element is also long overdue.
In a letter from Skye Bank, dated April 10, Atlantic Energy was reminded of repayment its outstanding obligations ($39,232,428.16) on the $120 million loan facility it took from the bank.
“Kindly refer to our various correspondence and discussions regarding your outstanding obligations on the above subject facility ($120 million). This is to remind you that the total sum of $39,232,428.16 plus accrued interest is past overdue for payment on your facility,” the letter said.
The letter was signed by Tutu Alu, manager, corporate banking group, and Tosin Faniro-Dada, relationship officer, corporate banking group.
Another letter from First Bank, dated February 20, tacitly refused a request from Atlantic Energy seeking to restructure the loan facilities it has received from the bank, hinging it on some stringent conditions.
“We refer to the meeting held on 19th February 2015 and your request for a restructure of your facilities coupled with lenders’ consent to change the ownership structure of Atlantic Energy. We wish to state that, even as we are mindful of the set timeline, we are constrained to progress your request further until we receive the following documents: (1) copy of the executed NPDC/Atlantic Energy reconciliation, (2) copy of executed NPDC repayment plan, (3) addendum to the SAA, (4) NPDC consent to the restructure of the company.”
The FBN letter also included the following conditions that must be met before considering Atlantic Energy’s request: “provision of standby Letter of LC to secure crude oil liftings, and payment of all overdue obligations, coupled with the injection of $100 million to reduce exposure to lenders.”
The letter was signed by Deji Abisola, business manager, corporate banking group (energy and utilities), and Jide Ayeronwi, group head, corporate banking group, (energy and utilities).
Also, in spite of the billions of dollars it has enjoyed over the years, Atlantic Energy has not filed its accounts with the Federal Inland Revenue Service (FIRS) as stipulated by law. Using an influential lawyer, who sources said is the company’s legal backbone, Atlantic Energy has continued to hold on to the legal advice that it is not liable to tax.
In a letter from FIRS, dated February 17 , Atlantic Energy was warned of the consequences of its refusal to submit the accounts and returns within the next ten days. It was signed by the duo of Okeowo Taiwo, and Ocheja E.F., FIRS’ manager (tax) and deputy manger (tax) respectively.
It reads: “It is worrisome to note that we are yet to receive the draft accounts/returns as promised. Let me remind you that the accounts/returns are long overdue for submission. You are advised to submit the accounts/returns within 10 days from the date of receiving this letter, failing which FIRS shall enforce compliance with the relevant tax laws.”
Transfers, cash withdrawals
Sadly, a company that could not meet its financial obligations was on a spending binge, with its directors living ostentatiously (owing private jets and armoured jeeps) and transferring huge sums – sometimes in billions and millions of naira and dollars – into accounts of both local and foreign organisations. And if the local transfers raised some red flags, so were the numerous transfers of millions to foreign accounts (see a table on foreign accounts) of Expedia Marine Company Limited, Energy Property Development Ltd, Petrochemicals Offshore, SPOG Petrochemicals Limited, Premium Aviation Services Ltd, Ibalex Nigeria Limited, and numerous others, where funds were paid at different times.
Interestingly, Atlantic Energy is enmeshed in huge debts – albeit self-imposed. But it seems the embattled company is not ready to go down alone. Not only has it closed its office, it also did not pay its staff for more than one year. It has equally defaulted in the payment of workers’ pension and PAYEs, leading to a mass resignation crisis that swept the company even before it closed its shop recently. Even business partners were not left out, as Atlantic Energy, which kept booking flight tickets and enjoying services from international and reputable companies, did not meet its obligations to its numerous clients, wrecking havoc on several businesses. Now, Atlantic Energy owes NPDC about $2billion, banks $550million, workers $5million, and other vendors $20million. This explains why the banks as well as NPDC appear helpless, as Atlantic Energy is frantically looking for investors to buy the company and the massive debts to boot.
The Nation learnt that the promoters of Atlantic Energy are negotiating a soft-landing with some people that are very close to the corridors of power with a view to refunding a paltry amount. Their stratagem is to sway the new administration to avoid the “unnecessary controversies” that a probe may generate so that they can be asked to go and sin no more. As part of a grand strategy to achieve their objective, some foot soldiers have been enlisted, including some highly-placed Nigerians, to reach out to President Muhammadu Buhari to strike a deal on their behalf, fearing that any inquiry into the books of NPDC and other agencies in the highly opaque oil and gas sector will most likely unearth a can of worms. Will President Buhari, who is widely revered as an incorruptible man, allow them to walk away free after what seems like clear financial crimes against the country? Time will tell
Why Nigerians shouldn’t frustrate Dasuki’s investigation — Ikponmwen
Onwuka Nzeshi and Johnchuks Onuanyim
We won’t comment on security matters — APC spokesman
A former Director, Legal Services of the Nigeria Army, Brigadier General Idada Don Ikponmwen, yesterday threw his weight behind the ongoing investigation into allegations of treasonable felony leveled against the immediate past National Security Adviser, Col. Sambo Dasuki (rtd) . He urged Nigerians not to frustrate the current efforts by the Federal Government to fight corruption and impunity in the country.
Ikponmwen, a onetime Provost Marshal of the Nigeria Army, said while he had nothing personal against the embattled former NSA, he would want the Federal Government to investigate Dasuki thoroughly, given the weight of the allegations against him and the need to establish the truth about his roles in the counter- terrorism war in the last six years.
He expressed dismay at the protests in some quarters since the DSS raided the Abuja and Sokoto homes of Dasuki and argued that the search conducted on these residences were in order as long as the security officials who went on the operation were armed with search warrants obtained from a court of law.
“I believe that Nigerians should support anything that would unearth any wrong that had been done. There is a procedure and the Department of State Services(DSS) told us that they got a search warrant from a court of law.
Once you have a search warrant, you can go anywhere and search . If you don’t spring surprises, how can you get anything from your investigations? “Where are we going in this country? When the President doesn’t act, they quarrel; when he acts, they raise issues. When would we stop creating obstacles on the path of good governance? I support any move that would bring out the truth and a new move to stop us from going down the road to perdition which corruption has put us.
Even if President Buhari does nothing else but only to fight corruption convincingly and successfully, this country would be on its way to re- inventing itself in the comity of nations. Corruption has been a major problem of this country not only in the immediate past regime but over the years. We have to start from somewhere and in so far as President Buhari is a man known to have zero tolerance for corruption, Nigerians must be happy when he moves against corruption,” he said.
Ikponmwen said that if the preliminary findings of the investigations are anything to go by, Dasuki should be made to explain what the armoured vehicles, lethal weapons and other items found in his home were meant for even after he had relinquished his position as the NSA.
Meanwhile, the ruling party, All Progressives Congress ( APC) yesterday declined comments on the Dasuki saga and the allegations of treasonable felony against him. National Publicity Secretary of the APC, Alhaji Lai Mohammed, told New Telegraph yesterday that the APC would not comment on the charges against the former National Security Adviser, Col. Dasuki Sambo because it was purely a security issue.
Monday, 20 July 2015
Read Buhari’s Article Posted on Washington Post today, Affirms Ministers Will Be Appointed In September
Ahead of his visit to President Obama today, President Buhari wrote an article for the Washington Posttitled ‘Nigeria committed to good governance and fighting terror” where he datiled what he has done so far and what he plans to do towards the fight against Boko Haram and corruption. He also affirmed that his Ministers will be appointed in September. Full text of the op-ed below..
This month, the world moved a step closer to the defeat of Boko Haram, the jihadist group that has terrorized hundreds of thousands in the northern states of Nigeria. In one of my first acts since taking office as president six weeks ago, I have replaced the heads of Nigeria’s army, navy and air force. Our new military leadership has not been chosen because of their familiarity with those in government, as was too often the case in the past, but on their track records and qualifications alone.These new military leaders will be based in Borno State in northern Nigeria, where the headquarters of the armed services has been relocated. This shift of resources and command directly to the front line, in addition to the replacement of the head of the State Security Service, Nigeria’s intelligence organization, and a new emphasis on working in partnership with our neighbors, has equipped us to take the fight directly to Boko Haram.
Already we are beginning to see a degrading of Boko Haram’s capabilities as a fighting force. In recent weeks, it appears to have shifted away from confronting the military directly to an increase in attacks on civilian areas, as we saw only last week when an elderly woman and 10-year-old girl blew themselves up at a Muslim prayer gathering in northeastern Nigeria. We should not be confused by this change, hateful as it is: It does not mean that Boko Haram is succeeding in its aims — it shows that it is losing.
While we work to defeat the terrorists, I ask the people of Nigeria and the world for resolve and fortitude. The campaign we will wage will not be easy; it may not be swift. We should expect stages of success and also moments when it may appear that our advances have been checked. But no one should have any doubt as to the strength of our collective will or my commitment to rid this nation of terror and bring back peace and normalcy to all affected areas.
Similarly, my determination should not be underestimated in other matters. This includes instilling good governance and tackling the scourge of corruption that has held Nigeria back for too long.
As I meet with President Obama today — the first time a president of the United States will encounter a Nigerian counterpart following the peaceful transfer of power in a contested election in our history — I will be discussing my plans for critical reforms. So, too, will I discuss why the formation of my administration is taking time and, crucially, why it must. Already there are voices saying these changes are taking too long — even though only six weeks have passed since my inauguration. I hear such calls, but this task cannot and should not be rushed.
I cannot stress how important it is to ensure that this process is carried out correctly, just as it has been crucial to first install the correct leadership of the military and security services before we fully take the fight to Boko Haram.
There are too few examples in the history of Nigeria since independence where it can be said that good management and governance were instituted at a national level. This lack of a governance framework has allowed many of those in charge, devoid of any real checks and balances, to plunder. The fact that I now seek Obama’s assistance in locating and returning $150 billion in funds stolen in the past decade and held in foreign bank accounts on behalf of former, corrupt officials is testament to how badly Nigeria has been run. This way of conducting our affairs cannot continue.
Indeed, the failure of governance, it can be argued, has been as much a factor in Nigeria’s inability thus far to defeat Boko Haram as have been issues with the military campaign itself.
So the path we must take is simple, even if it is not easy: First, instill rules and good governance; second, install officials who are experienced and capable of managing state agencies and ministries; and third, seek to recover funds stolen under previous regimes so that this money can be invested in Nigeria for the benefit of all of our citizens.
We seek the support and partnership of the United States in these tasks. The importance of the fight against terrorism and corruption in Nigeria, Africa’s most powerful economy and largest populace, cannot be underestimated. Our allies can provide much-needed military training and intelligence as our soldiers take the war effort to Boko Haram. Similarly, we look to U.S. businesses as well as the Obama administration to help develop governance initiatives that can ensure that Nigeria’s wealth benefits all its people, not just a few. By taking these steps, we will be positioned to benefit from increased investment — particularly in energy and electricity — from the United States.
I was elected on a platform of change. I know this is what the people of Nigeria desire more than anything else. I know they are impatient for action. I realize the world waits to see evidence that my administration will be different from all those that came before. Yet reforming my country after so many years of abuse cannot be achieved overnight. In our campaigns against both Boko Haram and corruption, we should remain steadfast and remember, as it is said: “Have patience. All things become difficult before they become easy.”
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