Culled from THISDAYLIVE
Monday, April 30, 2012
BOMB BLAST AT THIS DAY OFFICE:THIS IS MY STORY by GRACE CHIMEZIE
Culled from THISDAYLIVE
Sunday, April 29, 2012
HOW BABANGIDA, ABACHA, OBASANJO SHARED NIGERIA'S OIL BLOCKS
How Babangida, Abacha, Obasanjo Shared Nigeria's Oil Blocks By Obinna Akukwe
The process of sharing Nigeria's oil block national cake is as fraudulent now as when Ibrahim Babangida started the process of discretionary allocation of oil blocks to indigenous firms.
Discretionary allocation of oil blocks entails that a president can reward a mistress who performs wonderfully with an oil block with capacity for cumulative yield of over $20 billion dollars without recourse to any process outside of manhood attachments. Babangida, Abacha, Abdulsalami and Obasanjo awarded discretionary oil blocks to friends, associates, family members, party chieftains, security chiefs and all categories of bootlickers, spokespersons and cult members without any laid down procedures.
The recipients of such oil blocks 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 block. 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 block national cake is distributed to a few Nigerians.
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 t 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. The nation loses billions of dollars in diverted revenue whenever any round of auction occurs.
OML 110 with high yield OBE oil fields was given Cavendish Petroleum owned by Alhaji Mai Daribe, the Borno Patriarch in 1996 by Sanni Abacha. OBE oil field has estimated over 500 million barrels of oil. In layman's language and using average benchmark of $100 dollars per barrel, translates to $50 billion dollars worth of oil reserve. When you remove the taxes, royalties and sundry duties worth about 60% of the reserve payable over time you get about $20billion dollars worth of oil in the hands of a family.
OPL 246 was awarded to SAPETRO, a company owned by General Theophilus Danjuma, by Sanni Abacha in 1998. Akpo condensate exports about 300,000 barrels of crude daily.
OML 112 and OML 117 were awarded to AMNI International Petroleum Development Company owned by Colonel Sanni Bello in 1999. Sanni Bello is an inlaw to Abdulsalami Abubakar, former Head of State of Nigeria.
OML 115, OLDWOK Field and EBOK field was awarded to Alhaji Mohammed Indimi from Niger State. Indimi is an inlaw to former Military President Ibrahim Babangida.
OML 215 is operated by Nor East Petroleum Limited owned by Alhaji Saleh Mohammed Gambo. OML 108 is operated by Express Petroleum Company Limited is owned by Alhaji Aminu Dantata. OML II3 allocated to Yinka Folawiyo Pet Ltd is owned by Alhaji W.I. folawiyo.
ASUOKPU/UMUTU marginal oil fields is operated by Seplat Petroleum. Seplat is owned by Prince Nasiru Ado Bayero, cousin to the Central Bank Governor Lamido Sanusi. This oil field has the capacity of 300,000 barrels of oil daily. This translates to $30million dollars daily at average benchmark of $100 dollars per barrel. Deducting all sundry taxes, royalties etc , this field can yield $12billion dollars daily for the owners .
Intel owned by Atiku, Yarádua and Ado Bayero has substantial stakes in Nigeria's oil exploration industry both in Nigeria and Principe and Sao Tome.
AMNI owns two oil blocks OML 112 and OML 117 which it runs Afren plc and Vitol has substantial stakes in oil blocks. Afren plc is operating EBOK oil fields in OML 67. Vitol lifts 300,000 barrels of Nigerian oil daily. Rilwanu Lukman, former OPEC Chairman has stakes in all these named three companies.
OPL 245 was awarded to Malabu Oil& Gas Company by Sanni Abacha. Dan Etete, Abacha's oil minister owns Malabu Oil. In 2000, Vice President Atiku Abubakar convinced Obasanjo to revoke OPL 245 given to Malabu Oil. Etete had earlier rejected Atiku's demand for substantial stakes in the high yield OPL 245 and it attracted the venom of Ota Majesty who revoked the licence. However, in 2006, Obasanjo had mercy on Dan Etete and gave him back his oil block worth over $20 billion dollars.
OPL 289 and OPL 233 was awarded during Obasanjo era to Peter Odili fronts, Cleanwater Consortium, consisting of Clenwater Refinery and RivGas Petroleum and Gas Company. Odili's brother in law, Okey Ezenwa manages the consortium as Vice Chairman.
OPL 286 is managed by Focus Energy in partnership with BG Group, a British oil concern. Andy Uba has stakes in Focus Energy and his modus operandi is such that you can never see his name in any listings yet he controls OPL and OML through proxies.
OPL 291 was awarded to Starcrest Energy Nigeria Limited, owned by Emeka Offor by Obasanjo . Immediately after the award, Starcrest sold the oil block to Addax Petroleum Development Company Limited (ADDAX) Addax paid Sir Emeka Offor a farming fee of $35million dollars and still paid the signature bonus to the government. Emeka Offor still retains stake in ADDAX operations in Nigeria.
Mike Adenuga's Conoil is the oldest indigenous oil exploration industry in Nigeria. Conoil has six oil blocks and exports above 200,000 barrels of crude daily.
The oil block national cake sharing fiesta could take twists according to the mood of the Commander-in –Chief at the particular time. In 2006, Obasanjo revoked OPL 246 which Abacha gave to Danjuma because he refused to support the tenure elongation bid of the Ota Majesty. In 2000, Obasanjo had earlier revoked OPL 241 given to Dan Etete under the advice Atiku. However, when the Obasanjo-Atiku faceoff started, the Ota Majesty made a u-turn and handed back the oil block to Etete.
During the time of Late President Yarádua , a panel headed by Olusegun Ogunjana was set up to investigate the level of transparency in the award of oil blocks. The panel recommended that 25 oil blocks awarded by the Obasanjo be revoked because the manner they were obtained failed to meet the best practices in the industry. Sadiq Mahmood, permanent secretary in the Ministry of Petroleum endorsed the report to then president with all its recommendations. As a result of the report Yarádua revoked eleven oil blocks.
In April 2011 Mike Adenuga attempted to buy Shell's OML 30 for $1.2 billion dollars. The Minister for Petroleum and Nigeria's most powerful woman refused the sale of the OML30 to Adenuga citing national interest. This block was later sold to Heritage Oil for $800 million dollars eleven months later.
This oil block business is so lucrative that Danjuma's Sapetro divested of its investment in Akpo condensate for $1billion dollars. This business is second to none in Nigeria. That is why any attempt to investigate the activities in this sector will always be futile. The money is so much that they give bribes in millions of dollars. A birthday gift or child naming gift from an oil block owner to a government official could be as paltry as $2million dollars, and if the official's father died, the condolence gift could reach mere $3 million dollars. When they want to bribe legislators, it is in millions of dollars and any ongoing investigation ends within weeks. They are so confident that with excess money they can buy up Nigeria and they are succeeding.
In the name of competitive bidding, which Obasanjo introduced in 2005, Officials bring companies overnight and through processes best described as secretive and voodooist they award blocks to party faithful, fronts and phoney companies. They collect gratifications running into hundreds of millions of dollars which is paid into offshore account and the nation loses billions of dollars of revenue to private pockets.
During the third term agenda, Obasanjo was deceived that the allocation of oil block to party faithfuls is to fund the third term agenda. With the failure of the third term, the beneficiaries went home with their fortunes and thanked God or Allah for buttering their bread. Senator Andy Uba co ordinate the award of the last rounds of oil block by Obasanjo in 2005 and 2007. The then minister of petroleum, Edwin Daukoru was a mere errand boy who took instructions from the presidential aide.
The regime of President Goodluck is not showing any signs of changing the status quo. Controversies have trailed the activities of the Minister of Petroleum and many players in the Industry accuse her of demanding stakes from every oil deal. It is hoped that President Goodluck Jonathan will remember his transformational promise to Nigerians and endeavour to face the hawks in the oil industry. The angst in the air is so much that if this monster of illegal allocation of oil block is not addressed, the much touted revolution could begin all of a sudden and all who condoned this illegality at the expense of hungry Nigerians may have nowhere to hide.
The religious leaders should tell these oil block beneficiaries, awarders, fronts, brokers and all involved in short changing the Nigerian people to find means or returning all these back to the Nigerian people, through massive development projects. They should curtail their constant visits to Mecca, Medina and Jerusalem for prayers and attend to the poverty they spread in the land. They should build affordable secondary schools, universities, specialist hospitals, roads, silos, etc for the Nigerian people. They should fund talent development programmes and sponsor activities capable of alleviating poverty. The voice of impoverished Nigerians is crying daily and if care is not taken the God who delivered Nigeria from Abacha dark days will visit them with calamities untold. With the rot in this oil block awarding system and other loot all over the Nigerian nation, something worse than revolution may happen.
Editor's note: This guest post is written by Obinna Akukwe, Post was earlier published on AfricanHeraldexpress
Culled from daily post Nigeria.
Tuesday, April 24, 2012
THE 61 RECOMMENDATIONS BY THE #FUELSUBSIDY COMMITTEE (Part 2)
41.All those in the Federal Ministry of Finance, Office of the Director-General Budget, and the Office of the Accountant General of the Federation involved in the extra budgetary expenditure under the PSF Scheme (2009-2011) should be sanctioned in accordance with the Civil Service Rules and the Code of Conduct Bureau.
42.The payment of N999,000,000 in 128times within 24hrs (12th& 13th January, 2009) by the Office of the Accountant -General of the Federation should be further investigated by relevant Anti-Corruption Agencies.
43.The National Assembly should enact an Act to criminalise extra budgetary expenditure.
44.CBN and the Federal Ministry of Finance should critically examine and review the policy guiding payment for importation of petroleum products to avoid the current fraudulent system that allows importers to bring in products from off-shore "Lome" or "Cotonou" to qualify for forex payments.
45.The Committee notes that several alarms were raised by the CBN on the escalation of subsidy figures but these early warning signals were ignored by relevant agencies. The Committee wishes to encourage whistle –blowing by regulatory agencies on threats to the economy with the hope that proactive measures could be taken.
46.The Committee recommends that the PPMC Management be overhauled. In furtherance to above recommendations of the committee, institutional mechanisms be urgently developed to ensure themonitoring of actual delivery of kerosene to the Nigerian masses.
47.The PPMC should deploy modern state-of-the-art devices to protect its facilities and pipelines to eliminate wastages arising from vandalism. In the short-term however, PPMC should establish a surveillance system which should incorporate Community-protection and using part of the bridging funds on the PSF Template to finance this.
48.All the extant circulars preventing the Nigeria Customs Service from carrying out its statutory functions be immediately withdrawn by the Central Bank of Nigeria and the Federal Ministry of Finance.
49.The Committee recommends that NNPC takes immediate action to pay the N46billion owed the Nigeria Customs Service and the N6billion owed to the Nigeria Ports Authority
50.The failure of NPA to provide this Committee the vital vessel data particularly the IMO numbers is an indication that either NPA has a very poor record keeping system or that it was a deliberate ploy to cover up the collusion between its officials and importers. We recommend an investigation into the operations and activities of this Authority.
51.The port operations of the Nigerian Ports Authority be investigated with a view to determining the extent to which its officials are complicit in the classification of maritime areas for reception of Nigerian bound petroleum products as "offshore Cotonou" and "offshore Lome" in the face of evidence that these Vessels never did lighter at those Ports.
52.In the course of this investigation, a lot of efforts were made to establish cases of round tripping and diversion of products, including the use of the data from Llyods List Intelligence resulting in the cases so far reported. However given the scale of connivance and collusion by government officials involved in the certification process, the Committee believes that further investigation will reveal more cases. It is therefore recommended that all the data obtained in the course of this investigation, especially from the Llyods List Intelligence be forwarded to the relevant anti-corruption agencies for a more detailed investigation.
53.The present Management of PEF (M)B should be overhauled and the Board when constituted should comprise of persons of impeccable integrity who should be knowledgeable in aspects of its mandate. This is without prejudice to the coming into force of the Petroleum Industry Act.
54.PEF(M)B should establish a tracking system on all trucks from point of loading to point of discharge (retail outlets) and direct that all trucks involved with transportation of products should install approved tracking devices on them.
55.It is hereby recommended that the regulatory capacity of the DPR be strengthened. The National Assembly should commence the process of amending the Act to make the Agency autonomous.
56.The DPR should take immediate steps to bring all facilities and depot owners into compliance with international best practices by ensuring the installation of modern metering gadgets and sealable and non-return valves, to eliminate the rampant cases of round-tripping.
57.The DPR should brace up to its role of Regulation and compel the NNPC/PPMC to comply with all the regulations issued to ensure transparency and accountability.
58.In order to reduce and gradually eliminate lightering, associated inefficiency and cost, Government should invest in the provision of Single Point Mooring (SPM's). This provision should be followed up by instituting Regulations to compel Owners of Jetties, depots and storage facility owners to develop pipeline throughput availability to facilitate direct delivery of imported products by heavy vessels, in-shore Nigeria.
59.There should be a deliberate policy by Government to encourage the utilization of gas in automobile, domestic (cooking), and industrial facilities.
60.As a matter of urgency and in furtherance of our national security requirements, a national strategic reserve should be immediately enhanced so to accommodate 90days stop gap strategic reserve.
61.We strongly recommend that relevant Standing Committees of the National Assembly should be more proactive in their oversight responsibilities to forestall future occurrences.
THE 61 RECOMMENDATIONS BY THE #FUELSUBSIDY COMMITTEE (part 1)
Based on the facts, issues and investigative interactions, the Committee hereby makes the following recommendations for the consideration and approval of the House.
1.From the findings of this Committee the consumption level for 2011 is estimated at 31.5 million litres per day.However, in 2012 marginal increment of 1.5 million litres a day is recommended in order to take care of unforeseen circumstances, bringing it to 33 million litres per day. And to maintain a strategic reserve, an additional average of seven (7) million litres per day(or 630million litres per Quarter) for the first quarter of 2012 only is recommended. Thus, PPPRA is to use 40 million litres of PMS in the first quarter as its maximum ordering quantity per day. In subsequent quarters PMS daily ordering quantity should be 33 million litres per day. For Kerosene, the Committee recommends a daily ordering quantity of 9 million litres.
2.With regards to the 445,000bpd allocation to NNPC to refine for local consumption, the Committee established that the allocation is sufficient to provide the nation with forty million litres per day for PMS and Ten million litres of HHK.
The above can be achieved conveniently through;
•SWAP arrangement,
• Offshore processing,
•Outright sale of the 445,000bpd and or partial sale of the excess from the local refining capacity of 53%.
Therefore there is no reason for government to grant subsidy importation to any other marketer.
Eventhough we have quoted 40 million litres as a liberal figure, in the course of monitoring the implementation of the subsidy regime the actual daily consumption will then be determined.
3.The NNPC should refund to the Federation Account, the sum of N310,414,963,613 (Three hundred and ten billion, four hundred and fourteen million, nine hundred and sixty three thousand, six hundred and thirteen naira only) paid to it illegally as subsidy for kerosene contrary to the Presidential Directive of July 29th, 2009 withdrawing subsidy on the product.
4.The Committee recommends that the NNPC should be unbundled to make its operations more efficient and transparent, and this we believe can also be achieved through the passage of a well drafted and comprehensive Petroleum Industry Bill. The Committee therefore urges the speedy drafting and submission of the bill to the National Assembly.
5.The Committee wishes to recommend that the House do direct for the auditing of the NNPC to determine its solvency. This was as a result of plethora of claims of indebtedness and demands for payments by NNPC's debtors which, if not well handled, will not only affect the entire economy of Nigeria, but also the supply and distribution of petroleum products.
Examples:Nigeria Customs Service=N46 billion
Nigeria Ports Authority =N6 billion
Trafigura et al =$3.5 billion
6.The House should direct the NNPC to stop any form of deduction not captured in the Appropriation Act before remittance to the Federation Accounts, and the Corporation should submit its transactions to the operational Guidelines of the Subsidy Scheme.
7.NNPC Retail, Independent Petroleum Marketers Association of Nigeria (IPMAN) and Major Oil Marketers Association of Nigeria (MOMAN) should be the outlets for the distribution of Kerosene to ensure availability and affordability of the product to Nigerians.
8.The NNPC should also refund to the Federation Account the sum of NGN285.098Billion being over-deductions as against PPPRA approvals for 2011. The Relevant Anti- Corruption Agencies
should further investigate the Corporation for deductions for the years 2009 and 2010.
9.As postulated earlier in this report, data provided by NNPC and CBN tends to suggest that for 2009, 2010, and 2011, NNPC deducted subsidy payments from two different accounts. It is the recommendation of this Committee that Relevant Anti- Corruption Agencies conduct thorough investigations into this matter and where it is established that double withdrawals were made, the extra amounts should be paid back to the Treasury and those involved prosecuted.
10.The Management and Board of the NNPC should be completely overhauled and all those involved in the following infractionsbe further investigated and prosecuted by the Relevant Anti -Corruption Agencies:
a.Payment of N285.098 Billion in excess of the PPPRA recommended figure for 2011
b.Subsidy deductions of N310,414,963,613 for kerosene against a Presidential Directive
c.Direct deductions from funds meant for the Federation Account in contravention of Section 162 of the Nigerian Constitution
d.Illegal granting of price differential (discounts) of crude oil price per barrel to NNPC to the tune of N108.648Billion from 2009-2011.
11.The relevant Anti- Corruption Agencies should carry out a due-diligence investigation to determine the total demurrage payments and outstanding incurred by NNPC for the period 2009 – 2011.
12.Under the PSF Scheme, importers especially NNPC should be mandated to patronize Nigerian Flagged vessels provided they produce the standard safety and sea-worthiness certificates in tune with international best practices.
13.All the payments which the PPPRA made to itself from the PSF account in excess of the approved administrative charges which were due to it under the Template should be recovered and paid back into the Fund. The officials involved in this infraction should be further investigated/prosecuted by the relevant Anti- Corruption Agencies. These confirmed illegal payments were the sum of NGN156.455Billion in 2009, and the sum of NGN155.824Billion in 2010, a total sum of NGN312,279Billion.
14.All staff of PPPRA and DPR involved in the
a. processing of Applications by importers, and
b. verification, confirmation and payment for imported products by Importers and NNPC
should be investigated/prosecuted by Anti- Corruption Agenciesfor negligence, collusion and fraud.
15.The Executive Secretaries of the PPPRA who were the accounting officers, and under whose watch these abuses were perpetrated that led to the Government losing billions of naira, should be held liable. Therefore, we strongly recommend that those who served as Executive Secretaries of PPPRA from January 2009 to October 2011 should be further investigated/prosecuted by relevant Anti- Corruption Agencies. This should also include GM Field Services, ACDO/Supervisor-Ullage Team 1, and ACDO/Supervisor-Ullage Team 2 within the same period,for their roles in the management of the ullaging under the subsidy scheme.
16.The Chairman of the Board of PPPRA from 2009 – 2011, and the entire Members of the board during the period are hereby reprimanded and their decision which opened the floodgate for the Bazaar is condemned in the strongest terms.
17.It is hereby recommended that Mr President should reorganize the Ministry of Petroleum Resources to make it more effective in carrying out the much needed reforms in the oil and gas sector.
18.Given the large and complex nature of the Ministry of Petroleum Resources, the Committee recommends that two ministers should be appointed to take charge of the upstream and downstream.
19.The current template being used by PPPRA in computing and paying PSF is full of in-built prices for wastages and inefficiencies (eg. Lightering exercise, demurrage) that could be plugged to save the Nation's scarce resources. We therefore recommend the revision of the template.
20.Henceforth the PPPRA margin of error on the payment Template for ascertaining allowable volumes on imported products should not be more than +/-5% as against the current +/- 10%
21.The PPPRA should provide the Nigerian Navy and NIMASA advance copies of allocation and vessel arrival notification documents to enable the Navy monitor, track and interdict vessels seeking to avoid Naval certification.
22.The Executive Secretary of PPPRA 2009 – February, 2011 should be investigated and punished for the official recklessness he exhibited in the implementation of the Board decision to reverse the qualification for participation in the scheme. The allocation/approvals to import products given to thirty-five (35) Companies before their formal registration with PPPRA testify to this. Companies that lack the required competence and expertise to import petroleum products and even those who did not meet up with the agreed standards were also awarded large chunks of the allocation, an act that culminated in huge loss of resources to the nation.Many Companies under his watch who had neither depots nor through-put agreement were allowed to participate in the Scheme contrary to the revised eligibility guidelines.
23.The practice whereby PPPRA as a regulator in the petroleum downstream sector being supervised by the Ministry of Petroleum Resources whose Minister is the Chairman of the Board of NNPC (a major importer/participant in the PSF scheme) negates the principles of checks and balances and international best practices.
The Committee thereforerecommends that the regulatory capacity of PPPRA be strengthened and the National Assembly should commence the process of amending the Act to make the Agency autonomous.
24.The PPPRA should, within two weeks of the adoption of this Report, conduct a performance assessment of ALL Companies involved in the PSF scheme and publish such reports.
25.The Committee is firm in its view that if any petroleum product is deserving of subsidy, HHK should enjoy a pride of place. It therefore recommends the immediate reinstatement of subsidy for Kerosene not later than second quarter, 2012 at pump price of N50 per Litre.
26. The Committee recommends that the sum of NGN557.70Billion should be provided for as Subsidy in the 2012 Appropriation Act, while the sum of N249.006B should be provided as subsidy for HHK (Kerosene).
Evidently, 445,000 bpd allocation to NNPC is sufficient to provide the nation with 40 MLPD PMS, 10 MLPD HHK, 8.97 MLPD AGO, 0.62 MLPD LPG and 2.31 MLPD of FO at the current NNPC refining capacity of 53%. It is only AGO that daily consumption in full could not be achieved. Since AGO has been deregulated, other marketers can make up for the 3.03 MLPDshortfalls.
27.The Committee recommends that FIRS should follow up on the companies listed earlier to pay their taxes with due penalties in line with the provisions of the Companies Income Tax Act.
28.The PSF Guidelines should be revised to make Tax compliance a mandatory pre-qualification requirement for all participants under the Scheme.
29.Marketers who obtained FOREX but did not import petroleum products should be referred to the relevant Anti- Corruption Agencies with a view to verifying what they used the FOREX for:
THOSE WHO OBTAINED FOREX BUT DID NOT IMPORT PETROLEUM PRODUCTS
S/NNAMES OF MARKETERS20102011
$$
1BUSINESS VENTURES NIG LTD22,927,339.96
2EAST HORIZON GAS CO. LTD20,735,910.81
3EMADEB ENERGY6,606,094.30
4POKAT NIG. LTD.3,147,956.19
5SYNOPSIS ENTERPRISES LTD51,449,977.47
6ZENON PET & GAS LTD.232,975,385.13
7CARNIVAL ENERGY OIL LTD-51,089.57
8CROWNLINES-4,756,274.94
9ICE ENERGY PETROLEUM TRADING LTD-2,131,166.32
10INDEX PETROLEUM AFRICA-6,438,849.64
11RONAD OIL & GAS W/A-4,813,272.00
12SERENE GREENFIELD LTD-4,813,360.75
13SUPREME & MITCHELLES-16,947,000.00
14TRIDAX ENERGY LTD-15,900,000.00
15ZAMSON GLOBAL RES.-8,916,750.00
TOTAL 337,842,663.8664,767,763.22
30.The following Companies that participated in the Scheme and refused to appear before the Committee and never submitted the required documents as was repeatedly announced during the hearing are to refund the various sums against their names. It is believed that these companies deliberately refused to appear because they had something to hide. The relevant Anti- Corruption Agencies should ensure full recovery:
S/NNAME OF COMPANYAMOUNT
(N)
1.Mut-Hass Petroleum Ltd1,102,084,041.30
2.Nepal Oil and Gas Service2,353,911,979.10
3.Oilbath Nigeria1,019,644,138.97
4.Techno Oil Ltd1,036,514,387.08
5.Somerset Energy Services3,015,221,487.94
6.Stonebridge Oil Limited1,784,158,258.14
7.Mobil Oil Nigeria14,934,371,661.76
8.AX Energy Limited1,471,969,643.31
9.CAH Resources Association Limited1,052,466,415.28
10.Crust Energy Limited1,192,651,581.76
11.Fresh Synergy Limited1,417,029,059.70
12.Ibafon Oil Limited4,687,730,540.46
13.Lottoj Oil and Gas Limited1,427,429,910.95
14.Oakfield Synergy Network Limited988,920,219.15
15.Petro Trade Energy Limited1,471,027,874.73
16.Prudent Energy & Service Limited1,360,898,638.10
18.Rocky Energy Limited1,620,110,167.58
TOTAL41,936,140,005.31
31.Payments for PMS with effect from the second quarter of 2012 should be based on certified truck outs at depots confirmed at the retail outlets and no longer on discharges from vessels into tank farms.Consumption should be defined in a way to exclude what is imported but only what is put in the tank.
32.The markets of opportunity situated within Nigerian territorial waters which are designated "offshore Cotonou" or "offshore Lome" to qualify for FOREX payment and to evade payment of appropriate levies, dues and taxes to the Nigerian government should be discontinued forthwith.
33.A Marine Transportation System should be put in place that is safe, secure, reliable, cost effective and efficient to reduce the present high cost of doing business in Nigeria.
34.Any importation without permit or where the difference is above approved quota should not be entitled to any amount on the Template.
35. It is strongly recommended that Marketers without storage facilities and retail outlets should be excluded from participating in the PFS Scheme as this will end the bazaar that constituted a serious drain on the nation's economy and created room for abuses.
36.The services of the accounting firm of Akintola Williams, Deloitte and OlusolaAdekanola& Partners should be discontinued with immediate effect for professional incompetence on this particular assignment.
37.In view of the above the 2 firms should be blacklisted from being engaged by any Federal Ministry, Department or Agency (MDA's) for a period of three years.
38.This Ad-Hoc Committee shall in its monitoring stage conduct extensive and thorough investigation into the operations of the PEF(MB) in order to ascertain the management of the bridging funds under the subsidy regime.
39.Penalties should also be indicated for non-compliance and promptly imposed to ensure the smooth operation of the Scheme.
40.The Nigerian Ports Authority (NPA) should be encouraged within a time frame to improve on the draught level of the Nigerian waters to encourage the berthing of ALL types of vessels so as to eliminate the present ship-to-ship (STS) transfers by importers of petroleum products.
41.All those in the Federal Ministry of Finance, Office of the Director-General Budget, and the Office of the Accountant General of the Federation involved in the extra budgetary expenditure under the PSF Scheme (2009-2011) should be sanctioned in accordance with the Civil Service Rules and the Code of Conduct Bureau.
42.The payment of N999,000,000 in 128times within 24hrs (12th& 13th January, 2009) by the Office of the Accountant -General of the Federation should be further investigated by relevant Anti-Corruption Agencies.
43.The National Assembly should enact an Act to criminalise extra budgetary expenditure.
44.CBN and the Federal Ministry of Finance should critically examine and review the policy guiding payment for importation of petroleum products to avoid the current fraudulent system that allows importers to bring in products from off-shore "Lome" or "Cotonou" to qualify for forex payments.
45.The Committee notes that several alarms were raised by the CBN on the escalation of subsidy figures but these early warning signals were ignored by relevant agencies. The Committee wishes to encourage whistle –blowing by regulatory agencies on threats to the economy with the hope that proactive measures could be taken.
46.The Committee recommends that the PPMC Management be overhauled. In furtherance to above recommendations of the committee, institutional mechanisms be urgently developed to ensure themonitoring of actual delivery of kerosene to the Nigerian masses.
Friday, April 20, 2012
EXECUTIVE SUMMARY OF HOUSE OF REPRESENTATIVE REPORT ON FUEL SUBSIDY
EXECUTIVE SUMMARY
Following the removal of subsidy on PMS on the 1st day of January, 2012 by the Federal Government of Nigeria and the attendant spontaneous social and political upheavals that greeted the policy, the House of Representatives in an Emergency Session on the 8th of January, 2012 set up an Ad-hoc Committee to verify and determine the actual subsidy requirements and monitor the implementation of the subsidy regime in Nigeria.
The Federal Government had informed the nation of its inability to continue to pump endless amount of money into the seemingly bottomless pit that was referred to as petroleum products subsidy. It explained that the annual subsidy payment was huge, endless and unsustainable. Nigerians were led to believe that the colossal payments made were solely on PMS and HHK actually consumed by Nigerians. Government ascribed the quoted figures to upsurge in international crude price, high exchange rate, smuggling, increase in population and vehicles etc. However, a large section of the population faulted the premise of the Government subsidy figures, maintaining that unbridled corruption and an inefficient and wasteful process accounted for a large part of the payments. To avert a clear and present danger of descent into lawlessness, the leadership of the House of Representatives took the bold and decisive action of convening the first ever Emergency Session on a Sunday (8th January, 2012), and set up the Ad-hoc Committee to verify the actual subsidy requirements of the country.
The Committee decided that the scope of this investigation should be for three years 2009 -2011 for the following reasons:
· The actual budget expenditure on subsidy for both PMS and HHK was tolerable, being N261.1b in 2006, N278.8b in 2007 and N346.7b in 2008. 5 companies including NNPC were involved in 2006, 10 in 2007 and 19 in 2008 contrasted to 140 in 2011.
· Secondly, in line with accounting practice, the Committee decided to investigate three years activities of the scheme.
· The Committee could have chosen to limit the investigation to 2011 alone given the scale of escalation of subsidy in that year alone but decided to take three years to establish a trend.
The Ad-Hoc Committee held Public Hearings from 16th of January, 2012 to 9th of February, 2012, taking sworn testimonies from 130 witnesses, receiving information from several volunteers, and receiving in evidence over 3,000 volumes of documents.
In the course of the investigations the Ad-Hoc Committee was able to establish the following:
1. Contrary to statutory requirements and other guidelines under the Petroleum Support Fund (PSF) Scheme mandating agencies in the industry to keep reliable information data base, there seemed to be a deliberate understanding among the agencies not to do so. This lack of record keeping contributed in no small measure to the decadence and rots the Committee found in the administration of the PSF. This is evident also in the budget preparatory process by MDAs where adequate data is not made available to the National Assembly. The Committee had to resort to forensic analysis and examination of varied and external sources (including the Lloyds List Intelligence) to verify simple transactions. In this regard, the PPPRA is strongly urged to publish henceforth, the PSF accounts on quarterly basis to ensure transparency and openness of the subsidy Scheme.
2. We found out that the subsidy regime, as operated between the period under review (2009 and 2011), were fraught with endemic corruption and entrenched inefficiency. Much of the amount claimed to have been paid as subsidy was actually not for consumed PMS. Government officials made nonsense of the PSF Guidelines due mainly to sleaze and, in some other cases, incompetence. It is therefore apparent that the insistence by top Government officials that the subsidy figures was for products consumed was a clear attempt to mislead the Nigerian people.
3. Thus, contrary to the earlier official figure of subsidy payment of N1.3 Trillion, the Accountant-General of the Federation put forward a figure of N1.6 Trillion, the CBN N1.7 Trillion, while the Committee established subsidy payment of N2,587.087 Trillion as at 31st December, 2011, amounting to more than 900% over the appropriated sum of N245 Billion. This figure of N2, 587.087Trillion is based on the CBN figure of N844.944b paid to NNPC, in addition to another figure of N847.942b reflected as withdrawals by NNPC from the excess crude naira account, as well as the sum of N894.201b paid as subsidy to the Marketers. The figure of N847.942b quoted above strongly suggests that NNPC might have been withdrawing from two sources especially when the double withdrawals were also reflected both in 2009 and in 2010.
However, it should be noted that as at the time the public hearing was concluded, there were outstanding claims by NNPC and the Marketers in excess of N270billion as subsidy payments for 2011.
Whereas the mandate of the Committee was necessitated by the removal of subsidy, the Committee found out that subsidy payment on kerosene formed an Integra part of the total sum.
4. On its part, NNPC was found not to be accountable to any body or authority. The Corporation, in 2011, processed payment of N310.4 Billion as 2009 – 2011 arrears of subsidy on Kerosene, contrary to a Presidential Directive which removed subsidy on Kerosene in 2009. The Corporation also processed for itself, direct deduction of subsidy payment from amounts it received from other operations such as joint venture before paying the balance to the Federation Account, thereby depleting the shares of States and Local Governments from the distributable pool. Worse still, the direct deduction in 2011 alone, which amounted to N847.942 Billion, was effected without any provision in the Appropriation Act.
5. While NNPC feasted on the Federation Account to bloat the subsidy payable, some of the marketers were involved in claiming subsidy on products not supplied. PPPRA laid this foundation by allocating volumes of products each quarter to the marketers which it knew were not in conformity with its own guidelines for participation.
6. Our investigation further revealed that certain marketers collected subsidy of over N230.184 Billion on PMS volume of 3,262,960,225litres that from the records made available to us were not supplied. Apart from proliferation and non-designation of bank accounts for subsidy payment, PPPRA and the OAGF were unable to manage in a transparent manner the two accounts they chose to disclose. There were indications that PPPRA paid N158 Billion to itself in 2009 and N157 Billion in 2010. When confronted, the OAGF was unable to submit details of the bulk payments arrogated to PPPRA and the account from which the bulk sums were disbursed to the supposed beneficiaries.
7. Curiously too, the particular Accountant-General that served during the period 2009 was found to have made payments of equal instalments of N999 Million for a record 128 times within 24 hours on the 12th and 13th of January 2009, totalling N127.872 Billion. The confirmed payments from the CBN records were made to beneficiaries yet to be disclosed by the OAGF or identified by the Committee. We however discovered that only 36 Marketers were participants under the PSF Scheme during this period. Even if there were 128 marketers, it was inconceivable that all would have imported the same quantity of products to warrant equal payments.
8. In order to arrive at a probable figure of daily consumption of PMS, the Committee took the entire volume of 14,787,152,340 litres imported by marketers and NNPC in 2011 as recorded by PPPRA and then deducted what we suspected as over-invoiced volume of 3,262,960,225. Thus, the actual volume imported for year 2011 was 11,510,202,347. This manifested into an average daily PMS consumption of 31.5 million litres.
9. However, in 2012 marginal increment of 1.5 million litres a day is recommended in order to take care of unforeseen circumstances, bringing it to 33 million litres per day. And to maintain a strategic reserve, an additional average of seven (7) million litres per day(or 630million litres per Quarter) for the first quarter of 2012 only is recommended. Thus, PPPRA is to use 40 million litres of PMS in the first quarter as its maximum ordering quantity per day. In subsequent quarters PMS daily ordering quantity should be 33 million litres per day. For Kerosene, the Committee recommends a daily ordering quantity of 9 million litres.
10. On the issue of kerosene subsidy, the Committee strongly advocated for a Government policy to immediately recommence subsidy payment on the product by urging withdrawal of the 2009 Presidential Directive.
11. We also proposed a budget amount of N806.766billion for the 2012 fiscal year for payment of subsidy on PMS and Kerosene.
12. For the 2012 Appropriation Act, the Committee's recommendation is based on the following follows:
PMS: 33,000,000 Litres x N44 (subsidy) x 365 days = N529,980,000.00
Provision for strategic reserve for 1st Quarter of 2012:
7,000,000 x N44 (subsidy) x 90 days N27,720,000.00
HHK 9,000,000 Litres x N101 (subsidy) x 274 days = N249,006,000.00
Total N806,766,000,000.00
Note: Commencement of kerosene subsidy is as from the second quarter of 2012, since the Committee is of the opinion that the product is still not under the subsidy regime.
Therefore, the Committee recommends the sum of N806.766billion as subsidy for year 2012.
13. With regards to the 445,000 bpd allocation to NNPC , the Committee believes that with the current refining capacity of 53% and the SWAP/Offshore processing arrangement of the balance of 47%, it is sufficient to provide the nation with the following products:
a. 40 Million Litres Per Day (MLPD) of PMS,
b. 10 MLPD of Kerosene (HHK)
c. 8.97 MLPD of Diesel (AGO) ,
d. 0.62 MLPD of LPG and
e. 2.31 MLPD of FO
It is only AGO whoseaverage daily consumption of 12 million Litres per day will not be achieved in full. Since AGO has been deregulated, other marketers can make up for the 3.03 MLPD AGO shortfalls. The implication of this finding is that if NNPC properly manages the allocation of 445 bpd efficiently, the availability of the products can be achieved by the NNPC alone. This contrasts the situation where in 2009-2011 NNPC got the daily allocation of 445,000bpd and the nation still had to import through Marketers.
Curiously, although NNPC confirmed that it makes some savings of about =N= 11.00 per litre refining locally than import, it could not be established that the Corporation reflects this cost differential in its claims to subsidy.
The Committee recommends that NNPC be unbundled to make its operations more efficient and transparent and this we believe can be achieved through the passage of a well drafted and comprehensive PIB Bill.
All those in the Management and Board of the NNPC directly involved in the infractions identified for the years 2009-2011 should be investigated and prosecuted for abuse of office by the relevant anti-corruption agencies.
14. Part of the funding sources of the PSF Account is over-recovery from marketers. This accrues when product landing cost is lower than the Ex-Depot price. The Committee observed that :
i. In 2009, there was an over-recovery of N2.766 Billion. This was expected to have been credited to the PSF Account but was not traceable to the official PSF Account disclosed.
ii. Furthermore, in the presentation made by Akintola Williams Deloitte it was claimed that the sum of NGN5.27Billion was established as over-recovery in 2009, however, there was no evidence that this money was credited to the PSF Account.
15. It is our view that the Guidelines of the PSF Scheme, even as watered down by the Board in 2009, could have salvaged the Scheme if they were observed and enforced. Had the staff of various agencies and government officials not compromised and colluded with certain marketers, the level of corruption would have been minimal. The Committee viewed this fact with serious concern and has suggested measures to ensure that impunity is no longer condoned. Therefore, marketers that had short-changed Nigerians were identified and recommended to make refunds within a time-frame of three months; civil servants were to be sanctioned in accordance with the Civil Service Rules as well as under extant Laws; management staff and top government officials were, based on the gravity of their offences, to be reprimanded, re-deployed, dismissed and, in specific cases, prosecuted for abuse of office and fraudulent practices.
16. The Committee recommended the refund to the treasury the sum of N1, 067,040,456,171.31 trillion from the under listed for various violations.
i.) NNPC (Kerosene Subsidy) - N310,414,963,613.00
ii.) NNPC (Above PPRA recommendation)- N285,098,000,000.00
iii.) NNPC (Self discount) - N108,648,000,000.00
iv.) Marketers (Total violations of PSF) - N8,664,352,554.00
v.) Companies that refused to appear - N41,936,140,005.31
vi.) PPPRA excess payment to self - N312,279,000,000.00
TOTAL N1,067,040,456,171.31
The Committee believes that if the PSF scheme was properly managed, this sum of N1.070trillion would have been available to the three tiers of Government for budget enhancement.
17. The Committee recommends that the following transactions be further investigated by the relevant anti-corruption agencies and determine their level of culpability with a view to making further recoveries;
i. Payment of N999m to unnamed entities 128times to the tune of N127.872b
ii. Companies who collected Forex to the tune of $402.610b whose utilization is questionable to the Committee.
iii. The 72 Companies listed under the financial forensics are hereby recommended for further investigation by the relevant anti-corruption agencies with a view to establishing their culpability and recovering the sums indicated against their names totalling N230, 184,605,691.00.
iv. The Over recoveries of N2.766b and N5.27b which were not accounted for by the office of the Accountant General of the Federation.
v. The cases of double deductions by the NNPC for subsidy payments in 2009,2010 and 2011 mentioned in this report.
Culled from omojuwa.com
Wednesday, April 11, 2012
PROJECT ONE MILLION SOULS
FIRST, LOVE
This isn't the typical boy meet girl, boy likes girl and girl likes him back, music in the background as they kiss under the pouring rain kind of story. To me, it's more than that; it's about two boys who showed me what love really is about, in its purest form. Meet David and Joseph.
David was brought into this world with no love talk more of a silver spoon. His first cradle was a polythene bag with which his mother dumped him in and left him to face the intricacies of this onerous world alone in the discomfort of the bush. By a stroke of luck, he was found by a Good Samaritan who took him to an orphanage home.
Growing up, he became close friends with Joseph another child in the home whose story isn't far off from his. I can't put in plain words the beauty that transcends just watching this two together… I think it was those little things they did for each other, the sharing of biscuit that was never enough or the cheese balls they shared?, or when Joseph hugged David when he was sad, or sipping from the same drink, or the little pranks they played? I don't know where I saw it because it's unseen yet so visible.
They aren't blood brothers although they bare the same surname with the other 160 children in the home; I believe they could discern that they weren't actually bonded by blood. The admirable fact is that they are bonded by the one word I have not come to entirely comprehend - Love. Today, I'm not here to preach, give this or give that, because you can give all of those without truly loving. Today, I ask you to take off your shoes and step into the worn out pair my friends wear.
Now, take a second and figure where it hurts, is it the used clothes you have to wear? Is the fact that your biological parents left you all alone? No one to come for your Open day at school, or is it the countless uncelebrated birthdays? Or the fact you don't even know the actual date when you were born? Have you ever taken a second to think if we "the so called privileged" ever actually show love? Just maybe you have an imperative role in an all-encompassing plot? Maybe it isn't just about you? Maybe there's a child out there, a homeless person down the road losing hope and it's our task to restore just that? You have not lived today until you have done something for someone who can never repay you - John Bunyan Never deprive someone of hope; it may be all they have…. It's time we made a difference, it's time we stopped the show of pity and celebrate love, and it's time we act, true love is always backed up by actions, spare some time to birth a smile. Let there be a festival, a Festival of love.
Life isn't just about you or me; it's also about the role we have to play in the story of others, the smiles we leave eternally on the faces of people we meet. Now, here is an opportunity to act, this Apri 7,2012 , join hands with Project One Million Souls as we celebrate love, it's going to be a festival, a Festival of Love with the Children from orphanages, Adults from the Aged Homes, The Blinds and Disabled, Boys and Girls From Remand Homes . Love comes first. "Never doubt that a small group of thoughtful, committed people can change the world. Indeed, it is the only thing that ever has." - Margaret Mead. But then, this is what I think, what do I know?
Written by : Funto Ayinoluwa (@ObaFuntAy )
Wednesday, April 4, 2012
DEAD MEN WALKING
I remember walking along a footpath with two friends in Ijebu - Igbo, Ogun state when we noticed a hole in the ground and curiously I asked my friends to join me in fishing out whatever must be hiding in it. My friends who did not share my curiosity paid me no heed and said they didn't want to get biting by a snake, they would rather pass peacefully without disturbing what ever animal had found solace in the hole.
That experience stays fresh in my memory because it stirred in me thoughts about the lazy Nigerian, who in fear of death or suffering has refused to challenge the status quo and demand good governance from his leaders. Only a few have resolved to become agents of change while defying the corrupt tendencies of our Nation's leaders. I am however glad that few youths are part of the ranks.
What is worth living in a life filled with fear, uncertainty, public negligence, lack of good education and insecurity? Let's no deceive ourselves, we are dead men walking.
Call Nigerians names like "Lazy african scum" or "scary cat" that however, would not rouse them from their laid back posture towards government activities. All you keep hearing is "you wan die, life sweet o". Later on when there is a power failure or they witness one of many factors that still makes Nigeria a 3rd world country, they sit in their houses and rain curses on government officials. Little wonder it is rumoured that our government officials visit the shrines of local priests for rituals that would help ward off curses and evil which their fellow country men in frustration have cast upon them.
In the words of Henry David Thoreau, "You cannot dream yourself into a character; you must hammer and forge yourself one." We cannot keep dreaming of a Nigeria where everything works and life is beautiful, we must take off our jackets, roll our sleeves and get busy forging the Nigeria of our dreams.
The monies meant for national development are being squandered by politicians and their croonies. They have filled banks with money, bought properties and still have an excess of 2 billion naira which they hide under their beds. Yet we continue to live like nothing happens, in the words of Fela, we keep suffering and smiling.
If only we could find 25 Million youths, who are ready to become active agents of change. We would change our country in a short time.