Daily Trust (Abuja)

2 November 2012

Nigeria: Who Is Afraid of Ribadu Report?

Photo: Vanguard
Mallam Nuhu Ribadu

analysis

Lagos — Barring last minute change, the Malam Nuhu Ribadu-led Petroleum Revenue Special Task Force would today submit its report to President Goodluck Ebele Jonathan for necessary action.

The committee is one of the panels set up by the President in the wake of last January's national protest over the mismanagement of fuel subsidies by some people and firms.

It was required to, among others, determine and verify all petroleum upstream and downstream revenues (taxes and royalties, etc,) due and payable to the Federal Government of Nigeria and to take all necessary steps to collect all debts due and owed; to obtain agreements and enforce payment terms by all oil industry operators.

It terms of reference is between 2002 and 2012.

Last week, leakage of the report to the press shocked many Nigerians on the enormity of corruption that has characterized the nation's oil and gas sector in recent times, which had denied them value addition to their lives.

Nigerians are satisfied with the fact that Malam Nuhu Ribadu, the former boss of the Economic and Financial Crimes Commission (EFCC) did not mince words on the rot in the system as revealed in the report.

Since its leakage, the report presents different meanings to different Nigerians. Opposition parties in the country felt the report will not be different from others that have been submitted to the President without any action.

They said the present administration has no muscle to fight corruption, let alone implement the recommendations of the document.

The Ribadu's Committee report is already causing ripples in the presidency as two groups in the cabinet of the President have emerged with diverse opinions on the document.

Those in favour of immediate action were said to be anchoring their position on the need for the government to sustain its anti-corruption drive as was witnessed in the disclosure and subsequent arrest of some oil marketers.

The group called the reformers within the cabinet, was said to have counseled that the political cost of keeping the report away from the public was greater than making it public, a position said to have been presented to the president.

The other group was said to have warned against the government being stampeded into abandoning due process in treating reports of committees set up by government, insisting that the report had to be assessed and a white paper issued as was the case with similar committee reports in other ministries.

Minister of Petroleum Resources, Mrs. Diezani Alison-Madueke, however said there was no plan to cover up the findings of the committee. She said another panel had been set up to look into the contents.

"We have set up a team that is looking at them across the board to see if there is a difference in opinion or a difference in perspective. This team will complete its work and submit a comprehensive report in the next 10 days," she said.

Observers said the minister's statement could be taken to mean that the report would be watered down before it would be made public due to certain revelations therein which the government is not comfortable with.

One of the committee members, Chief Anthony George Ikoli (SAN), was said to have disowned the report and accused Ribadu of failing to carry along other members in the assignment.

Another member, however, said he was not surprised at the comments in the media by people who might have leaked the report in order to find avenues to discredit it.

"When the first draft was written, we were all given copies and asked to go through and make comments and suggestions. To the best of my knowledge, no one disowned any statement of fact," he said.

But Special Adviser to the President on Media and Publicity, Dr. Reuben Abati, said excerpts from the report could not be taken as an official document because the committee has not formally submitted its report to the appropriate authority.

He said the report in the public domain was suspicious.

He said: "The report cannot be taken as an official document because the proper procedure is for committees set up by the government to submit their reports to the government. In principle, this report in the public domain is suspicious because it was not submitted to the appropriate authority."

Department of Petroleum Resources, one of the institutions indicted by the report, said it would come up with its reaction to the report in due course, deputy director of the agency, Mrs. Belema Osibodu, told our correspondent on telephone.

According to the Ribadu panel's report, Nigeria lost over N16 trillion revenue in the last 10 years to criminal activities in the nation's oil and gas sector.

The report said N10 trillion was lost to crude oil theft, from a yearly loss of 250,000 barrels per day or N1 trillion yearly, from computations made by international oil companies and government officials, while N178 billion worth of refined petroleum products was stolen from the pipelines, through vandalism orchestrated by thieves.

It said $5 billion short-payment was discovered from sale of domestic crude oil to the Nigerian National Petroleum Corporation, while the latter also recorded a deficit of N298 billion from the accounts of its 16 subsidiaries.

Between 2002 and 2012, $183 million (N28.7 billion) remained outstanding from signature bonuses, while the Department of Petroleum Resources recorded another $2.9 million (N455 million) outstanding from its various concessionaires.

A total amount of $3.027 billion (N475.2 billion) was recorded, it said, by the task force as outstanding royalties, with Addax Petroleum alone defaulting by $1.5 billion in 2003 fiscal regime.

According to the report, the nation lost $29 billion (N4.55 trillion) to deficit payment from the sale of Liquefied Natural Gas (LNG), while $115 million (N18 billion) outstanding was discovered unreconciled from the amount of penalties for gas flaring. It said $58 million (N9 billion) remained uncollected from the companies that were penalized.

The taskforce said hydrocarbon theft was found to be a major and chronic source of revenue loss to Nigeria, adding that theft of crude oil and refined petroleum products may be reaching emergency levels in Nigeria.

It observed various estimates by international oil companies and government officials of the scale and volume of crude theft, which ranged from 6 to 30 percent of production, adding that it could actually be as high as 250,000 barrels per day, closer to 10 per cent of daily production, amounting to as high as N1 trillion annually. This issue therefore requires immediate attention.

"The task force did not receive comprehensive figures documenting volumes of refined products stolen or spilled. PPMC also recorded 4,468 product pipeline breaks in 2011, 98 percent of them from sabotage; and values the products stolen from its pipeline network between 2001 and 2010 at N178 billion," the report said.

It said its review of the records received for 2002 to 2011 showed an inconsistent pattern in the implementation of the policy to allocate 445,000bpd to NNPC, with variances found for the 10 years reviewed.

According to the task force, the review revealed that over a 10 year period (2002 -2011), the state may have been short paid by an estimated $5 billion, although it was understood from discussions with NNPC officials that the pricing of domestic crude oil was based on international prices.

The task force found that legislation governing the industry and agreements with third parties are outdated, do not reflect current economic or legal realities; or include ambiguous clauses.

Reacting to the report, conveners of End Inpunity Now, a non-governmental organization, David Ugolor and Jaiye Gaskia, bemoaned the rate of corruption in the sector and called on the Federal Government to investigate and prosecute the boards and management of all implicated agencies.

They also advised President Jonathan to sack the petroleum minister, saying she bears direct oversight responsibility for the mess.

Mr. Bayo Olufela, an energy expert, said the Ribadu committee report is another revelation that the nation's oil and gas sector has been milked by people who do not mean well for the country.

He urged the President to muster the political will to implement the recommendations of the committee with a view to putting the sector on a sound footing. It is glaring that the report has ruffled the feathers of some bigwigs going by the complaints of some members of the committee.

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Mallam Nuhu Ribadu

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