15 May 2017

Nigeria: Oil Majors, Banks Face Probe Over $62b Capital Flight

Abuja — The Senate has begun investigation into activities of some banks for allegedly colluding with some International Oil Companies, IOCs, to defraud Nigeria. This is as over $62,909,716,417 was said to have been taken out of the country between August 2009 and December 2014 in suspicious circumstances.

A document obtained, yesterday, showed that the affected banks were asked by the Senate to submit all copies of certified Nigeria Export Proceed, NXP, issued/or processed by them in respect of all crude oil and gas exported by Nigeria Agip Company Ltd, Chevron Nigeria Limited, Shell Petroleum Development Co. Nig. Ltd and their affiliates between April 1996 and December, 2016.

According to the document, the affected banks were also asked to produce all domiciliary accounts opened and /or closed within the period specified for all crude oil and gas exported.

Some banks had appeared before the investigative joint committee, last Thursday, while other banks that have been identified with the export of oil and gas will also appear.

The "Investigation of the pre-shipment inspection of export activities in Nigeria" is being conducted by the Senate joint committee on Finance, Trade and Investment, Gas, Petroleum Upstream, Banking, insurance and other Financial Institutions, Judiciary, Human Rights and Legal Matters, and Customs and Excise.

A member of the committee, Senator Yusuf Yusuf (Taraba State), wanted to know why funds brought into the country as oil export proceeds were wholly withdrawn a day after such proceeds were brought into the country.

He stressed that the probe became imperative because the banks have obligation under the law to ensure that petroleum products exporters did the right thing by obeying the guidelines and laws of the country.

Senator Yusuf said: "It is worrisome that money comes in today, tomorrow the same amount goes out of the country. The practice runs through statement of account submitted by the banks. The oil companies bring in $20 billion today, tomorrow $20 billion is taken out of the account.

"Some of the banks are colluding with multinational oil companies to defraud the country. The government relies on the banks, the banks are now colluding with the multi-national oil companies."

Senator Yusuf, who noted that it was obvious that Nigeria was not getting the correct export proceeds from oil and gas exports, stressed that the banks had a responsibility to abide by the law.

He said it was worrisome that no indications were made about who paid for the oil exports.

According to him, the committee is interested in knowing why the same oil company that exports products, paid for it without indication of who actually bought the products and the corresponding bank.

In his remarks, Chairman of the joint committee, Senator John Enoh, noted that the committee was also interested in ensuring that banks were not colluding with IOCs to flout the laws of the country.

He said the committee would take a critical look at the submissions made by the banks to come to terms with the true position of oil and gas exports proceeds processes.

A document submitted to the committee showed that one of the banks operates domiciliary export proceed accounts for several IOCs.

The document also showed that Nigerian Agip Oil Company recorded a total export inflow of $15,372, 882,703.36; Chevron Group, $44,020,596,289.99; and Shell group, $3,516,237,425.79, giving total of $62,909,716,417 billion.

The committee resolved to go through the documents submitted by the banks before coming up with its recommendations.

It also expressed its determination to get to the root of pre-shipment inspection of export activities in the country.

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