•Obasanjo Pix: Sun News Publishing

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A possible average of N51 billion may have been monthly fleeced from Nigeria in the last eight years, as the Obasanjo administration superintended over what would probably go down in history as the most porous financial regime at the nation’s oil house: the Nigerian National Petroleum Corporation (NNPC).

This is even as documents and investigation findings at the disposal of the SATURDAY SUN suggest that there might even be more sleaze than already unearthed.
Speaker of the House of Representatives, Hon. Dimeji Bankole, while allaying fears of the acolytes of the former president, Olusegun Obasnjo a few weeks ago, had submitted that the intention of the nation’s lower legislative chamber was not to witch hunt Obasnjo, but to carry out its normal oversight functions and set the records straight on the running of both the upstream and the downstream sectors of the oil industry while the immediate past administration lasted. However, while Bankole continues to reassure the loyalists of the former president, there are interested Nigerians – operators in the sector, waiting in the wings to offer assistance, albeit unsolicited, to the lawmakers on where to beam their searchlights.

SATURDAY SUN investigations revealed that even before the present federal lawmakers developed interest to unearth what transpired in the most strategic sector of the economy during the last eight years, a federal agency which plays the role of oversight functions on the nation’s treasury, the Revenue Mobilization and Fiscal Allocation Commission [RMFAC] had raised alarm over a shortfall of about $2.20 billion in NNPC report of revenue accruing to the Federation Account from the sale of crude oil between January and July 2002 alone. The chairman of RMFAC had predicated its findings on data sourced from the NNPC itself, the CBN and the Federal Ministry of Finance. It was a national alert that was hushed by Obasanjo, the NNPC, and CBN.

Curiously, the same document is believed to have been made available to the then leadership of the Economic and Financial Crimes Commission (EFCC) when it called for those who have any evidence of corruption against the then incumbent President Obasanjo to come forth with such evidence. However, the commission is not on record to have done anything with the information, even as Obasanjo had turned the whole issue into a laughable political drama, when he publicly asked the EFCC to go ahead and investigate him.

Missing $2.2 billion
An oil industry source revealed to SATURDAY SUN that the NNPC had declared only $3.55 billion, instead of $5.03 billion, as revenue from direct export crude sales between January and July 2004, giving a short fall of $1.48 billion. It was followed by another $0.74 billion from the sale of domestic crude oil, as NNPC declared $1.20 billion, instead of the actual figure of $4.94 billion. ‘Concerned operators in the oil industry had then prodded the national assembly to take up the alert from the RMFAC, but an ubiquitous Presidency, using the PDP apparatus, had intimidated the House of Representatives from initiating a public hearing on the missing $2.20 billion, a SATURDAY SUN source submitted.

NNPC crude, no man’s crude
To meet up with local demands for fuel, the nation’s four refineries, with joint refining capacity of 445,000 barrels of crude per day, were allocated crude. Even when the refineries could not refine up to its installed refining capacities and the NNPC had to augment the shortfall with exportation of refined petroleum products, the crude allocation was not slashed, leaving agitated Nigerians aghast as to what happened to the crude, while the NNPC and the Petroleum Products Pricing Regulatory Agency, [PPPRA] continue to feed the nation with lies of its discomfort in subsidizing petroleum products.
“Such excess crude that doesn’t fall within the officially stipulated OPEC quota was given out to individuals and corporate institutions for ‘public relations’, or to bunkering agents for sale at the spot market for a commission.’

Incidentally, for most of Obasanjo’s tenure, the average quantity of crude refined by the combined efforts of Nigeria’s four refineries oscillated around 214,000bpd, leaving a difference of 211,000bpd.
Now, going by the fact that, by OPEC statutes, crude for local consumption are never to be sold, the best the NNPC could do would have been to get the extra refined abroad, at a cost, and reshipped back to Nigeria

The document observed: “The value of this unrefined excess ‘domestic’ crude (even at the then low spot market price of $60 per barrel)” approximated to about N51 billion per month at the then prevailing exchange rate of N135 to the dollar.

This was the amount the NNPC, and its supervisor (President Obasanjo who had no substantive minister of petroleum) had to dispose as they so wished.
According to the document, there were three possible ways the presidency could have dealt with the excess: allocate it to private businessmen, political and business cronies and/or corporate institutions. “In either case, the president is the sole determinant of the application of the proceeds”, the report noted.
It continued: A similar case is also seen in the CBN monthly report of May 2004. Nigeria produced 82.77 million barrels of crude oil in May 2004, but exported only 68.82 barrels at the rate of 2.22 million barrels per day, leaving excess crude in hand of 13.95 million barrels in that same month of May. Again, this excess unsold export crude, valued at $837 million, is available to the president… even though it is well within Nigeria’s OPEC-approved export quota of 2.60 million bpd and ought to have been exported”.
“Is EFCC not interested in tracing the destination pocket of this ‘no man’s crude?’, the document asked.

Subsidy myth
The document also makes nonsense of the perennial claim by both the Obasanjo presidency and the NNPC that the cost of subsidizing imported refined products was putting enormous strain on its finances – a strain which the NNPC GMD once said came to as much as N300 billion annually.
According to the document, given the fact that the quota statutorily allocated for domestic consumption has no opportunity value (cannot be legally sold offshore and the income applied by government to any other use, no matter how important) the government had no other choice than to refine the extra 211000 bpd outside the country.

If it did, the excess was definitely enough to meet the about 110,000 bpd shortfall between local refining and local consumption. For while the value of Nigeria’s excess unrefined crude was put at about $12.66 million per day, the value of its local consumption requirement came to about $6.42 million per day. So, the document concluded thus:
“Therefore, no subsidy is involved in the importation of refined products, and so, the cost remains the same as if it were refined in Nigeria. Part of the surplus cash in hand would meet the refining costs. If NNPC Group Managing Director now states that importation of refined products is subsidized, then who is drinking this left over from the approved domestic crude which the refineries are unable to refine?”.

NAPIMS and the fraud of cash calls
SATURDAY SUN investigations further revealed that one subsidiary of the NNPC that the House of Representatives committee must beam its searchlight on is the National Petroleum Investment Management Services [NAPIMS]. It is the subsidiary given the statutory responsibility to monitor and verify the exploration costs or budget of the multinational oil exploration companies that Nigeria is involved with in Joint Venture Agreement or Production Sharing Contracts.

‘Under Obasanjo, the oil multinationals were left entirely to prepare their production costs, thus undermining the NAPIMS that should do the supervision… So, don’t be surprised that they all rushed to Abeokuta when the then NNPC big man wrote to them to make handsome donations to the Mr.. President Library Project’, the source submitted.

It would be recalled that in February 2004 the National Assembly had moved to block the payment of some $1.6 billion to three of the joint venture companies as production expense, saying the money would be held until the companies have provided adequate documents to back their claims. But the president and the NNPC went behind the senate and released the money.