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Wednesday, 11 September 2019

They are counter-suing in the United States; arguing that London is not the right jurisdiction on a case of this nature. The EFCC describes it as “daylight robbery” and is launching its own forensic investigation. Attorney-General Abubakar Malami predictably blames the PDP administration for “conniving with local and international contractors in a bid to inflict grave economic adversity on the Federal Republic of Nigeria and the good people of Nigeria”. But P&ID insist that the government and Malami were to blame for their dilly-dallying and prevarication. The beat goes on.

The $9.6 billion award against Nigeria is a scam from the pits of hell. Oil mogul General Theophilus Yakubu Danjuma (retd.) recently revealed that it was in fact his own company that first initiated the proposal for a gas processing plant to the Federal Government. The Irish school dropouts that were working in his office allegedly stole the idea and ran away with it. They also allegedly made away with $40 million of the funds which he had set aside for the project – probably the same amount P&ID are claiming to have sunk into the project.

Having hustled in our country for 30 years, the Irish highwaymen could not have gone that far without complicity with some of our people. I, therefore, welcome the forensic investigation that the EFCC is launching. We are told that the contract was signed on behalf of the government by the late oil minister Rilwan Lukman. Some of my gentle readers may recall that when Vice-President Goodluck Jonathan was acting for the bed-ridden Yar’Adua, Lukman treated him with unbelievable scorn. Jonathan had to get rid of him when he reshuffled the cabinet in March 2010. Umaru Yar’Adua returned to his maker on May 5, 2010 and was immediately succeeded by Goodluck Jonathan.

During his presidency, Umaru made heroic efforts to resolve the youth unrest in the Niger Delta, but the situation was not one that would miraculously change overnight. The gas project was thus programmed to fail ab initio. I am yet to see any financial statements belonging to P&ID. They have no active official website and no track record in the oil sector; their claim to fame being one or two defence contracts for refurbishment of dilapidated armoured tanks.

It has recently been reported that a hedge fund subsidiary of the V. R. Group – a vulture fund that has reaped iniquitous profits by shorting debt-distressed countries such as Russia, Ukraine, Argentina and Greece – has taken a 25 per cent stake in P&ID. The vultures are lining up to reap where they did not sow!

The whole world agrees that awarding a staggering $9.6 billion (N3.2 trillion) to a shadowy company in anticipatory income for absolutely no work done is not only unconscionable and extortionate, it is odious in the extreme. Coughing out such an amount could precipitate devaluation of our naira while doing untold damage to our public finances. The award is anchored on the implausible assumption that such a project is risk-free, in total disregard of the volatility of global oil prices and the difficult geopolitical terrain of the Niger Delta.

The calculation of interest rates at seven per cent, when British and European rates have been at historic lows of 0.5 per cent for more than a decade, smacks of Shylockism, if not financial illiteracy. There is absolutely no evidence that P&ID had ever made any practical move towards building the gas processing plant. Their claim to have sunk $40 million on the project is patently fraudulent. If they had used it to bribe high officials, it would amount to a crime. Governor Godwin Emefiele of the CBN has testified that there has been no evidence of capital importation whatsoever by the shadowy entity called P&ID. Their claim that they were waiting for the government to lay down the pipelines only ends in a non sequitur: How could government have begun laying pipelines for a facility that did not exist?

Former Attorney-General Michael Aaondoaka, who was in a position to know, has testified that the standing rule was that any contract worth more than $20 million had to be brought before the National Executive Council for final approval. Federal procurement rules also required a Certificate of No-Objection from the Bureau of Public Procurement. No such procedures were followed. What we have before us may have been an illegal contract.

The current crisis exposes some of the defects in our national system. Our civil service is characterised by incompetence, corruption and sloth. Government is never run on professional principles. We have nothing comparable to what the renowned Israeli policy scientist Yehezkel Dror terms “the central mind of government”. There is no central strategic coordinating framework that pools all government policies and strategies together to ensure effective coherence and effective, measurable and monitorable implementation. We also have no central mechanism for documentation and monitoring of all international contracts. It is even unclear who has the ultimate authority for the signing of oil and gas contracts. This is obviously the kind of confusion that P&ID exploited to put us in the mess that we are in today.

It is disappointing that a country like ours, with its galaxy of star-studded luminaries, does not really have world-class international lawyers, unlike a small country such as Cameroon. This is why they made us look like mere sophomores during the infamous Bakassi trial at The Hague. The Yaoundé Institute of International Relations trains the bulk of the country’s international lawyers, diplomats and international civil servants. It is a centre of excellence in Francophone Africa. We have nothing comparable.

In defending our corner, we need to prove that the contract itself was fraudulent in origin and intent – and was entered into in bad faith. It did not follow our laid down procedures. And it was also structured to be patently unenforceable. We also need to show that P&ID is a shadowy offshore entity that had not invested a dime in our country, despite their fraudulent claims. At the same time we should pursue quiet diplomacy with the British and Irish governments, while making a detailed inventory of all their businesses operating in our jurisdiction. Politics, after all, is the art of the possible!

The biggest lesson in this entire fiasco is the need for far-reaching reforms in our oil and gas sector. We have it on authority that before his sudden death in April 1998, General Sani Abacha was planning to indigenise the entire sector by calling the bluff of the oil majors.

The Iranians are reviled in the West today because they were the first to wean themselves from the stranglehold of the oil majors. In 1951 Prime Minister Mohammed Mossadegh, a brilliant intellectual and jurist, took bold steps to nationalise the oil industry which since 1913 had been a monopoly of Anglo-Persian Oil (renamed British Petroleum). Britain took the matter to the ICJ in The Hague. The Anglo-Iranian Co. Case was a landmark in international law. In dismissing the case, the ICJ reaffirmed the right of sovereign nations to exercise full control over their own natural resources. The losers orchestrated a military coup that overthrew Mossadegh in August 1953.

From January 1956, when oil was discovered in Oloibiri, the global majors have reaped staggering profits while destroying the ecological patrimony of the Niger Delta peoples through gas-flaring and uncontrolled environmental pollution.

Unlike Saudi Arabia, UAE and Kuwait, we do not operate a metering system. We rely on guesstimates for the quantity of crude lifted daily from our shores. When inspectors from the Federal Ministry of Petroleum come for audits, they are kept in hotels and lavishly entertained – the grandest larceny of the millennium! Add to it the massive theft carried out by Lebanese, Indian and Ukrainian reptiles, in full connivance with our navy and other military and security apparatchiks.

But there is a rainbow even in this legal Tsunami. It offers us an opportunity to rethink our oil sector while reviewing all subsisting contracts with foreign firms. We should explore alternative partnerships from the emerging economic powers. We must call the bluff of those who continue to treat and embarrass us over natural resources as though we were mere tenants on our ancestral homeland. Our honour and the welfare and destiny of our people depend on it.

About IWIN

The Independent Energy Watch Initiative (I-WIN), an enterprise of Energy ConServ and the Roundtable for the Growth and Development of Power (RODEP), is an online/web based power sector portal that strives to engage stakeholders and the Nigerian public on topical issues in the power sector.

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