A Washington Post report in 1999 first sounded the alarm on OML 112 and OML 117, among other fabulously lucrative oil wells, surrendered as parting gifts to cronies and die-hard supporters of the military governments of late General Sani Abacha and his successor, General Abdulsalami Abubakar.
The US-based newspaper had re-echoed the rising concerns of western diplomats and observers about how empty the incoming elected civilian government would find the country’s bank accounts “following a spending spree by the departing military rulers.” According to the newspaper, the Abdulsalami “Abubakar’s military government has drained the country’s foreign currency reserves by perhaps $3 billion in what business sources say was a burst of corrupt spending for the profit of senior officers and their business partners.”
It was not only the depleted foreign reserve that was the focus of the Washington Post. Amidst negotiations for an IMF loan to fill the country’s empty coffers and give the incoming civilian administration some financial foothold, to begin with, it was discovered that about nine weeks before the historic end to military rule, the military’s ruling council railroaded the state-owned oil company – the NNPC – to allocate “11 oil exploration licenses without seeking competitive bids that would have brought the state a fair market price.” The oil licenses were awarded without any form of bid.
International market analysts at the time were of the opinion that had the right prices been paid for those eleven oil fields, Nigeria would have had no business knocking on the door of the IMF.
The 11 licenses, located in “geologically attractive areas” were handed to Nigerian companies linked to senior military officers or former Abacha business associates”. One of the oil firms,
Amni International, is owned by Sani Bello, whose son is married to General Abdulsalami Abubakar’s daughter. Indeed, Sani Bello, a retired Colonel in the Nigerian Army and a former military governor of Kano State is the father of the current governor of Niger State, Abubakar Sani Bello. His son’s wife, the First Lady of Niger State, Dr. Amina Bello, is the daughter of the former military Head of State, General Abdulsalami Abubakar.
Other beneficiaries linked to the 11 controversial oil licenses were the second-in-command to General Abubakar, the late military Vice President, Admiral Mike Akhigbe; the chief of defense staff, Air Marshal Alamin Daggash; the chief of army staff, Gen. Ishaya Bamaiyi; the Lebanese brothers, Jack and Gilbert Chagoury – ill-famed for their involvement in elaborate money laundering scheme for General Sani Abacha – and; Abacha’s former petroleum minister, Dan Etete.
The most opaque oil industry in the world
It is not for nothing that Nigeria’s oil industry answers to a notorious sobriquet, “opaque”. Among the myriad problems like oil theft, royalty fraud, and gas flaring; the intractable transparency problem, particularly beneficial ownership appears to be the worst insidious harm to poor host communities who often do not know the faces of the true owners of oil wells in their locality.
Like the toothless bulldog it is perceived to be, the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), again recently directed all lease and licence holders operating in the country’s oil and gas industry to submit the full list of real owners of their companies within one week. The NUPRC said it was implementing the beneficial ownership reporting system, as it is a statutory requirement, which demands full disclosure of beneficial ownership information.
The commission said it was engaging the oil and companies to ensure their mandatory compliance; adding that the idea was to ensure that citizens were aware of whom they were doing business with or competing against, maintaining that it will also encourage appropriate stakeholder engagement, which is a part of Nigeria’s open government action plan.
Ironically, while the identities of international oil companies (IOCs) like Shell, Chevron, and ExxonMobil are known to ordinary Nigerians, the same cannot be said of the identities of owners of indigenous oil firms.
On the true ownership of the 11 controversial oil mining licenses, Air Marshal Alamin Daggash disassociated himself from Anchorage Petroleum, the company to which he had been linked. In what appeared a comedy of the absurd, not even the NNPC that supposedly sold the licence could at the time tell who the owners of Anchorage Petroleum were. The new civilian government of President Olusegun Obasanjo added to the confusion when it disclosed that Anchorage Petroleum was not even registered; yet was granted an oil license, perhaps without even asking for it.
Paul Katuka, a Maintenance Engineer formerly with the Nigeria National Petroleum Corporation (NNPC) – now called Nigerian National Petroleum Commission Limited (NNPCL) – told BUSINESS LEAKS that with his over 28 years of service to the Corporation, he could authoritatively describe the then Department of Petroleum Resources, DPR – now called the Nigerian Upstream Petroleum Regulatory Commission, NUPRC – as a nest of corruption and tricksters.
Katuka said: “The DPR is almost the centre of gravity of the NNPC but that is also where all the big magic are performed. It is a deceit each time the DPR claim they do not know the beneficial owners of an oil well when it is the DPR geologists that are involved in exploration exercises and naturally are the first to scientifically know the volumes of oil contained in a particular well or field.”
The maintenance engineer further explained: “The DPR are the ones to first know whether an oil well is lucrative or not. What happens is that when a lucrative oil well is identified, the information is taken to powerful oligarchs, and then the politics of who will own it begins.”
The ownership of a lucrative oil well is rarely based on the highest bidder. More often ownership is based on a political patronage system that thrives on cronyism, nepotism, and membership in a sociocultural group, tribe or religion. Legend has it that the late Borno billionaire, Alhaji Mai Deribe, famed for his golden palace in Maiduguri and a customized Gulfstream G550 private jet, was gifted one of his crude oil wells after playing a game of draughts with the then military strongman, General Sani Abacha. The approval for the oil well was allegedly written on a piece of paper. Till his death in 2002 monthly sales receipts from his oil wells were estimated to be higher than the combined monthly internally generated revenues and the combined monthly federal revenue allocations to eight poorest states in Nigeria.
Of the 11 controversial oil licenses (two awarded shortly before General Abacha’s death) handed out as parting gifts by General Abdulsalami, only one – OPL 245 – made riotous headlines on account of its ownership.
Dan Etete was a debonair oil minister that served under General Abacha. Etete hooked up with Abacha’s son, Mohammed Abacha, and together they floated an oil company called Malabu Oil and Gas which unsurprisingly was allocated a lucrative oil block, OPL 245.
Following Abacha’s death, it became an uphill task for Etete to retain the oil well as successive governments tried to reclaim the oil asset. He eventually managed to get the interests of two international oil companies, Shell and the Italian company Eni, but the process dragged on for years as OPL 245 was seen to have been acquired illegally using a false identity. What more, Etete was found to have paid only $2 million of the $20 million legally required by the state.
In 2007 Etete was found guilty of money laundering by a French court. He was also found to have used illicit funds to buy a speedboat and a chateau. In the same year he was convicted and sentenced to three years imprisonment with a fine of 300,000 euros. In 2014 however, he was pardoned by the French government.
The sale to Shell and Eni finally became a reality after the government of President Goodluck Jonathan recognized Etete as the rightful owner of OPL 245. The Economist reported that about $500 million of the $1.3 billion paid by the two IOCs was shared by Nigerian government officials. In all of these, the ordinary Nigerian, particularly the host communities in the beleaguered Niger Delta, were left not even with the short end of the stick. They were left with polluted rivers, diseases, degraded farmlands, gas flares, ramshackle schools and a vicious poverty circle.
Forbes Rich List
In 2013 Forbes Rich List, tagged “Africa’s 40 Richest Net Worth”, Colonel Sani Bello – the governor’s father – was listed to be worth $500 million. Forbes’ profile of him reads: “Sani Bello is the founder of Amni International Petroleum Development Co., an oil exploration company with a 50% interest in the Okoro Setu oil field, located in shallow water offshore Nigeria. Amni shares ownership of the Okoro Setu field with London-listed exploration firm Afren; production averages 18,200 barrels a day.
Barely two years after the Forbes outing, traditional rulers from Eastern Obolo Local Government Area, Akwa Ibom state, petitioned the federal government to withdraw the operating license of Amni International Petroleum Company Limited. In January 2016 about 30 village heads, in addition to multitudes of families constituting the host communities of OML 112 converged at Okoroete, the headquarters of Eastern Obolo, at a press conference to air their grievances against Amni Petroleum.
The 30 chiefdoms lamented continuous pollution and neglect of their communities and the deteriorating relationship between the oil company and the people of the area. The chiefs said a representative of Amni Petroleum walked out on them in the middle of a peace meeting held in Uyo, Akwa Ibom state, on March 5, 2015.
The petitioners’ collective grievances against Sani Bello’s Amni were: (1.) “Embarking on Okoro Further Field Development Project without consultation with the host community of Eastern Obolo”, (2.) Refusal to comply with the provisions of the MOU that stipulate 25 percent human resources development from the host community”, and (3.) “Refusal to review the MOU that had expired six years ago”.
About 60 official letters sent to the oil company were rebuffed, according to the embattled villagers who also bemoaned that not a single development project had been contributed to them by Amni even when OML 112’s ultimate beneficial owner, Sani Bello, was celebrated as a philanthropist in his native Niger State.
“The only evidence that shows we have oil in our communities is our polluted water, our polluted farmland and our polluted air”, chorused the villagers.
The people of Eastern Obolo are identified by the United Nations Development Programme (UNDP) to be among the ‘poorest of the poor’ in the world.
In early 2017, a Panama Paper report co-authored by two Nigerian journalists, Emmanuel Mayah and Joshua Olufemi, brought discomfiting international attention to the ultimate beneficial owners of OML 122. Digging deep into the infamous Mossack Fonseca dossier of over 11 million sleaze files, otherwise called the Panama Papers, it was discovered that the scion of Sani Bello’s business empire, Governor Abubakar Bello, had assets hidden in offshore territories, including the notorious British Virgin Islands.
At least two offshore companies were traced to the governor, one of which was used to acquire a property on Harvey Lodge London.
One of the companies, Best International Holding Limited, was registered in 1999 in the British Virgin Islands. The company was registered on May 26, 1999 with $50,000 as shares capital.
The company, with registration number 314717, has the governor and his son, Shehu Bello, as directors.
Tax authorities the world over view the British Virgin Islands with a certain level of notoriety and suspicion. Offshore company structures are sometimes marketed to rich businessmen and politically-exposed individuals to avoid or evade tax obligations in their home countries or conceal ill-gotten wealth.
While the two directors of Best International Holding Limited gave their Nigerian address as 17A Wurno Rd, Off Katuna Rd, Kaduna, Nigeria; a Lagos address was used for the registration of a second offshore company.
Another set of Mossack Fonseca documents showed that Governor Bello is the sole shareholder of a secret offshore entity by the name Eyre Investments Incorporated.
This investigation was carried out under the Collaborative Media Engagement for Development Inclusivity and Accountability Project of the WSCIJ, with funding from the MacArthur Foundation.