Following the discovery of crude oil in Nigeria in 1956, the nation’s foreign exchange earnings have depended largely on crude exports. This industry has also produced Nigerians who play big in the sector. However, Nigerians wonder why the poverty level is high in spite of revenue accruing to this sector, writes OLUSOLA BELLO.
The oil and gas industry is an international business that has often been dominated by multinationals, which engage in the exploitation and production of crude oil resources with Nigeria not being an exception.
The nation’s foreign earnings from the crude exploitation and production constitute over 95 percent of its yearly earnings and 14 percent to the Gross Domestic Product.
However, various schools of thought believe that Nigeria has no reason to be poor following its vast crude oil resources. In recent times, the alarming rate of poverty in the country has been blamed on the mismanagement of these abundant resources.
While multinational oil companies play dominant role in the sector in the country, it is assumed that the benefits accruing from oil exploration and production get to oil firms to the detriment of the generality of Nigerians.
Taking a critical look at the oil and gas industry, the multinational firms cannot entirely be blamed for the poverty level in Nigeria as many indigenous oil companies operating in the sector cannot be absolved from the situation facing the country.
A good number of Nigerians are also involved in oil exploitation and production. However, if these players are taken into consideration and are sensitive to its people, given the enormous wealth they control, then the level of poverty existing, especially in the Northern part of the country should not have existed.
Just as there are prominent people of southern origin that have oil blocks, so also are prominent northerners that have oil blocks. As a matter of fact, the level of oil and gas resources controlled by people of Northern origin cannot be matched by the entire operators from the South.
More Northerners have benefited and are still benefitting from the oil business in the country today. On a daily basis, they rake in several millions of dollars which if well utilized and a part of it generously extended to their kiths and kin, perhaps a large part of the Sahel or arid region of Nigeria which now breeds the Boko Haram will been living in Eldorado.
They could have invested a good percentage of the large sum of revenue realised from their oil blocks to the Northern economy thereby creating jobs for the teaming unemployed. But today, the poverty in the Northern region has bred millions of destitute that have become easy tools in the hands of Boko Haram.
Some of these prominent Nigerians were fortunate to have been given the oil blocks during the military era-largely dominated by military heads of states, many of which are of Northern origin. It would interest you to know that in some cases where oil blocks are given to Southerners, there are still some influential northerners behind them as chairman or member, board of directors.
Sometimes, some of these southerners serve as frontiers for these Northern military generals that do not want to be seen by most Nigerians.
Interestingly, some Southerners at the fore front of the oil business in the country includes Wale Tinubu which presides over the affairs of Oando Plc; Mike Adenuga of Conoil, Oba Otudeko, Honey Well Oil and Gas, Mike Otedola , Zenon Oil and Gas, Lulu Briggs of Moni Poulo Oil and Gas, Stella Oduah , the current minister of Aviation who was until her appointment the chairman and chief executive officer of Sea Petroleum and Gas (SPG), and Ifeanyi Ubah of Capital Oil and Gas company.
It is exciting to note that the core North through their aristocrats and ex-military rulers, rake enormous income from oil money (from the Niger Delta) individually, much more than any Individual/group of individuals from the South. Collectively, they are 10 times more than the entire Niger Delta business men in the oil and gas industry put together.
Investigations revealed that an estimated 75 percent of crude oil and gas produced by indigenous companies is controlled by the North. It is an area they have well conquered through Ibrahim Badamosi Babangida, Sani Abacha and Abdulsalami Abubakar.
However, the loots never get back home because of an uneven nature of the distribution of the nation’s wealth among the Northern elites and their military generals, who for decades where in charge of the nations affairs.
They did it so blatantly. While the nation wept about the oil windfall loot and others, Nigerians wailed as though they knew how much of the nation’s resources these folks appropriated to themselves and their business fronts before they stepped aside.
From Borno state where Boko Haram has its origin is Mai Deribe, who was awarded the operatorship of Oil Mining Licence( OML 110) which is operated by Cavendish Petroleum. The Borno patriarch, who even in death will remain the richest man dead or alive in the history of Borno state was given the oil block late Sani Abacha on the 8th of July, 1996.
OML 110 has a proven oil reserve in excess of 500 million barrels (more than the entire 300 million barrels reserve of Sudan). As yet with the capacity to produce about 120,000 barrels of crude oil daily from its OBE 4 and OBE 5 wells.
At current production levels, the Mai Deribes net circa N4 billion monthly in crude oil sales (using oil price estimates of ($100 p/b). Mai Deribe’s mansion, in allegedly poor Maiduguri is one of the most lavish mansions anywhere on earth. It used to be to be a tourist attraction before Boko Haram’s attacks.
Coming to Kano, the northern commercial nerve center, there is the like of Prince Nasiru Ado Bayero. He is a key shareholder and director in Seplat/Platform Petroleum Operators of the Asuokpu/Umutu Marginal Field with a capacity of 300,000 barrels monthly and a 30mmfcsd gas plant.
The oil facility is capable of feeding 100Mt of LPG. The Ado Bayeros, Yar’Aduas and Atiku Abubakar are Nigerian holders of Intels. It runs a private port that has grounded three federal ports in the South. There is also South Atlantic Petroleum Limited (SAPETRO).
South Atlantic Petroleum (SAPETRO) is a Nigerian Oil Exploration and Production Company that was created in 1995 by Theophilus Danjuma (also Chairman of ENI Nigeria). Erstwhile President Sani Abacha awarded the Oil Prospecting License (OPL) 246 to SAPETRO in February 1998.
The block covers a total area of 2,590km2 (1,000sq. miles). SAPETRO partnered with Total Upstream Nigeria Ltd (TUPNI) and Brasoil Oil Services Company Nigeria Ltd (Petrobras) to start prospecting on OPL246. Akpo, a condensate field was discovered in April 2000 with the drilling of the first exploration well (Akpo 1) on the block.
Other discoveries made on OPl 246 include the Egina Main, Egina South, Preowei and Kuro (Kuro was suspended as a dry gas/minor oil discovery). In June 2006, Theophilus Danjuma divested part of its contractor rights and obligations to China National Offshore Oil Corporation (CNOOC) for $1 billion (160 billion).
Akpo exports about 230,000 barrels of condensate daily. Condensate export is not regulated by OPEC, so SAPETRO/TOTAL exports as much as possible each day. Egina exports about 75,000 barrels of oil daily. Therefore, Akpo and Egina fields export just over 300,000 barrels of oil/condensate daily (three times what the country Ghana exports). SAPETRO (Theophilus Danjuma) gets 25 percent of this revenue.
The gas component of these fields is about 2.5 trillion cubic feet. The money SAPETRO nets each month is more than the monthly statutory allocation to any Nigerian state and also more than the oil revenue of Ghana.
Worthy of mention is AMNI (or is it AMIN?) International Petroleum Development Company. AMNI owns two oil blocks - OML 112 and OML 117. In the production sharing contract, AMNI gets 60 percent for owning the Oil Lock and Total gets 40 percent for providing technical advice. OML 112 was awarded on the 12th of February 1998 while OML 117 was awarded on the 4th of August 1999 by Abdulsalami Abubakar.
Operations started on both blocks on the 26th of February 2006. The licenses are due to expire 11th February 2018 and 5th of August 2019 respectively. The Okoro and Setu fields in OML 112 are operated by Afren Energy, a company substantially controlled by Rilwanu Lukman.
The Okoro and Setu oil fields have about 50 million barrels in reserve and currently produce/exports just a little below 20, 000 barrels per day. The chairman of AMN- International Petroleum and Development Company- is Sani Bello.
Mohammed Indimi, a close friend of Ibrahim Babangida, owned Oriental Energy Resources Limited. The company runs three oil blocks: OML 115, the Okwok field and the Ebok field. OML 115 and Okwo are PSC, while Ebok is a Joint Venture (JV). All of them crown offshore oil blocks.
OML 115 on its own is 228 sq Km. On OML 115 Oriental Energy Resources Limited has 60 percent while Equity Energy Resources AS, which Aliko Dangote’s Oil and Gas Investment vehicle has 40 percent. On Okwok, Addax has 40 percent and on the Ebok field, Oriental Energy Resources shares with none: its 100 percent Amni produces twice as much as Cavendish Petroleum.
It also not be forgotten that Express Petroleum and Gad Limited floated by Aminu Dantata, it was awarded OML 108 by General Abacha. CAMAC Houston, a company owned by Kase Lawal bought 2.5 percent of Express Petroleum’s 60 holdings. The other 40 percent on OML 108 is owned by Sheba E&P Limited which is alleged to be having some connection with one of Ibrahim Babangida’s companies SEPCOL operates the Ukpokiti offshore field in Shallow water Nigeria. With the level of oil magnet from the north the region has no reason to be poor.
Players in the oil business
Theophilus Danjuma, former Defense Minister, after his military career went into business. His investment in the oil and gas sector is immense. He was one time rated 21st richest person in Africa by Forbes magazine. He is the Chairman of South Atlantic Petroleum, SAPETRO, an oil exploration company.
In 2006, Danjuma was reported to have sold an oil block he was given by the regime of Sani Abacha to a consortium of Chinese investors for $1.7 billion. His net worth is put at $600 million. When he sold the oil block, he established the TY Danjuma Foundation with $100 million for the sole intent of philanthropy.
Afren Plc is an oil company in which Rilwanu Lukman was a former chairman and founder . His stake in the company is less than 3 percent. The company owns subsidiaries in various African countries of which Nigeria is one of them. Though the family of late George Enemoh (the wife, Grace Enenmoh is the Managing Director) runs the company, the influence of the former Petroleum Minister at several occasions and former Secretary General of OPEC (Oil and Petroleum Exporting Countries) cannot be overlooked.
Distinguished and highly successful businessman, Mohammed Indimi is the sole founder and Chairman of Oriental Energy Resources, Limited. He has over 20 years’ experience in the Nigerian Upstream Oil and Gas sector. Indimi, who is currently rated as the 30th richest man in Africa by Forbes magazine is an astute business man with a notable presence in the international business arena.
Oriental Energy, founded in 1990, has expanded its portfolio and currently has three assets under development in Offshore Nigeria. These include the Ebok Field (OML 67), Okwok Field (OML 67, and OML 115). He is an in-law of former president Ibrahim Badamosi Babangida and Sani Dangote, brother of Aliko Dangote
Muhammed Sani Bello, former military governor of Kano state became involved with various companies as chairman or director, after his retirement from the service; including former Broad bank Nigeria Ltd, Globe Re Nigeria Ltd, Law Union and Rock Insurance Company Plc, Amni International Petroleum Development Company Ltd, Dantata and Sawoe Construction Company Ltd, MTN Communications Ltd, Equatel Communication Ltd and the President of National Association of Indigenous Petroleum Explorers in Nigeria.
OML 112 (formerly OPL 469), is located in the eastern part of the Niger Delta. The block was awarded to Amni International Petroleum Development Company on a sole risk basis on the 24th of August 1993.
It covers an area of 437SqKm. OML 117 (formerly OPL 237) is similarly located. It was awarded to Amni on the 13th of October 1994 as OPL 237, and was converted to OML 117 for a term of 20 years on 6th August 1999. It covers 50SqKm.
A reclusive tycoon, Mike Adenuga runs Conoil Producing, the first Nigerian company to strike oil in commercial quantities in the early 1990s. Today Conoil Producing is Nigeria’s largest oil exploration company, producing an estimated 100,000 barrels per day.
Some years back, he was reported to have outbidden Aliko Dangote for an oil block. Conoil is reputed to be one of the few indigenous companies to have clinched Shell’s Oil Mining Lease (OML) 30.
Ranked 5th richest person in Africa, his total assets was put at 4.3 billion dollars but his interests in oil and telecom was not put into consideration. Only his fortune in banking was used in the rating. But everyone who knows the Adenuga’s empire knows the bank is just a fraction of his immense fortune. His telecom company, Globacom, is the second largest mobile telecom operator in size to MTN in Nigeria.
He is a recluse of sort. He moves about in customised bullet-proof cars with a platoon of bodyguards. He owns a private jet as well and he is considered the highest property owner in the ‘billionaires playground’ known as Banana Island in Ikoyi, Lagos.
When Oando CEO and nephew of Governor Bola Tinubu, Wale Tinubu covers the second issue of Forbes Africa magazine where he was referred to as the “The King of African Oil,” it only brought to fore the grip the Lagosian has in the African oil market.
A very quiet person, almost without social life, Wale started his growth in the oil business at Ocean and Oil Services before entrenching himself as a don in the oil and gas industry. The company he runs, Oando Plc, is a major oil products distribution company.