Bloomberg, the financial information giant, has described the $9.6 billion award against Nigeria as a judicial scam. Oil mogul Theophilus Yakubu Danjuma (Rtd.), recently revealed that it was, in fact, his company that initiated first the proposal for a gas processing plant. The Irish crooks working in his office stole the idea and ran away with it. They also allegedly made away with $40 million which he had set aside for the project, the same amount they are claiming to have sunk into the project.
Process Industrial & Development (P&ID) was registered in the British Virgin Islands in May 2006. They subsequently registered in Nigeria as a limited company in July of the same year. They put their company address as No. 12 Vaal Street (off Rhine Street), Ministers’ Hill, Maitama, Abuja.
The company claims to have successfully executed several projects for NNPC and Shell, among them are: construction of a bulk storage facility for liquid petroleum gas (LPG) at the cost of $106 million; $57 million contract for the building, installation and commissioning of Bonny Export Terminal for Port Harcourt refinery; and the design and installation of submarine power and fibre optic cable for Shell, at the cost of $53 million.
Before then the two Irish claimed to have refurbishing abandoned armoured tanks for the Nigerian army. But curiously, we have never seen their financial statements. What they have as a website is rubbish and nobody knows if they’ve ever paid a tax in our jurisdiction.
Having hustled in our country for 30 years, they well understood our weak points and they capitalised on them to the maximum. They could not have gone that far without colluding with some Nigerians. I, therefore, welcome the forensic investigation that the EFCC is launching.
In his testimony before the British Admiralty court, Brian Cahill mentioned as respondents the Department of Petroleum Resources (DPR) and National Petroleum Investments Management Services (NAPIMS), an NNPC subsidiary that oversees all government equity interests in the petroleum industry. He also mentioned Addax Petroleum, a Swiss oil company that was supposed to provide the gas for the project but had allegedly pulled out.
The contract was allegedly signed by late oil minister Rilwan Lukman. When Goodluck Jonathan, who was the vice president then, was acting for the bed-ridden Yar’Adua, Lukman treated him with unbelievable arrogance. Jonathan had to get rid of him when he reshuffled the cabinet in March 2010.
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 percent 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) for no work done is not only extortionate, but odious in the extreme. 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 and fraught geopolitical terrain of the Niger Delta. The calculation of interest rates at 7 percent, when British and the European rates have been at historic lows of 0.5 percent for more than a decade, smacks of Shylockism, if not financial illiteracy.
There is no evidence 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. Godwin Emefiele, CBN governor testified that there has been no evidence of capital importation whatsoever by the shadowy entity. Their claim that they were waiting for the government to lay down the pipelines is guilty of non sequitur: How could the government have begun laying pipelines for a facility that did not exist in the first place?
Michael Aaondoaka, former Attorney-General reveals that the standing rule was that contracts worth more than $20 million had to be approved by the National Executive Council. Federal procurement rules also require a Certificate of No-Objection from the Bureau of Public Procurement (BPP). None of such were followed.
The entire saga exposes some of the defects in our national system. Our civil service is characterised by incompetence, corruption, and sloth. The government is never run on professional principles. There is no central strategic coordinating framework that pools all government policies and strategies together to ensure coherence, effective and monitorable implementation. We also have no central mechanism for documentation and monitoring of all international 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 rather disappointing that a country like ours, with its galaxy of star-studded, loquacious legal luminaries, does not really have world-class international lawyers, unlike a small country such as Cameroon
It is rather disappointing that a country like ours, with its galaxy of star-studded, loquacious legal luminaries, does not really have world-class international lawyers, unlike a small country such as Cameroon. This is why they made us look like sophomores during the infamous 2009 Bakassi trial at The Hague.
In defending our corner, we must prove that the contract itself was fraudulent in origin and intent, was entered into in bad faith and was patently unenforceable. We also need to show that P&ID had not invested a dime, contrary to 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 the oil and gas sector. We have it on authority that before his sudden death on April 1998, Sani Abacha was planning to indigenise the entire sector by calling the bluff of the oil majors. He had planned on sending thousands of our brightest youths to Iran to be trained for that purpose.
The Iranians are reviled in the West because they were the first to wean themselves from the stranglehold of the oil majors. In 1951 Mohammed Mossadegh, prime minister of Iran 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 Hague. The judgement on 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.
But there is a rainbow on the horizon. This legal tsunami offers us an opportunity to rethink our oil sector while reviewing all subsisting contracts with foreign firms. We should explore alternative partnerships with emerging economic powers. We must call the bluff of those who continue to treat us and our natural riches as though we were mere tenants on our ancestral homeland. It is said that a fool and his money are soon parted. May such a fate never overtake us!
OBADIAH MAILAFIA
