The Federal Government has begun a high-powered probe of the circumstances that led to a major judgment against Nigeria over an aborted gas project, even as it said it would not relinquish assets to Process and Industrial Developments Ltd (P&ID), a firm registered in the British Virgin Islands.
The Nigerian government is also ready to appeal the recent judgment by a London court which ordered it to pay $9 billion, the equivalent of N3.5 trillion, to the British engineering firm, according to Information Minister Lai Mohammed, who addressed journalists at a major press conference in Abuja on Tuesday, alongside Abubakar Malami, minister for justice and Attorney-General of the Federation; Zainab Ahmed, minister of finance, and Godwin Emefiele, Central Bank of Nigeria (CBN) governor.
Already, President Muhammadu Buhari has directed the Attorney-General of the Federation to mandate the Economic and Financial Crimes Commission (EFCC), National Intelligence Agency (NIA) and the Inspector General of Police (IGP) to conduct a thorough investigation into the company and the circumstances surrounding the agreement, which includes commencing a full-scale criminal investigation.
Speaking at the press conference in Abuja, Information and Culture Minister Mohammed also gave assurances that the country would not lose any of its assets to P&ID as being reported.
“Despite the recent recognition of the award by a UK court, and contrary to some reports, Nigeria is not about to lose any of its assets to P&ID. There is no imminent threat to Nigeria’s assets,” he said.
The judgment delivered on Friday, August 16, 2019 is a fallout of the 20-year Gas Supply Processing Agreement (GSPA) purportedly entered into in 2010 between the Federal Ministry of Petroleum Resources and P&ID, which the Nigerian government insists the company never performed as agreed.
Explaining government’s position, Mohammed said in challenging the award, the Federal Government relied upon an expert report analysing the damages given to P&ID, which concluded that the damages were clearly unreasonable and manifestly excessive and exorbitant; went far beyond any legitimate protection of the commercial interest of P&ID; were completely wrong and obviously unjustifiable; and that the damages overcompensated P&ID on a frankly gargantuan scale and imposed a punitive award on Nigeria.
He said it was on this ground and others that the Federal Government took all available steps to resist enforcement before the UK courts unfortunately recognised the award and gave the company the authorisation to seize Nigeria’s assets.
“Nigerians should be assured that the Federal Government is taking all necessary steps to appeal the decision of the UK court, to seek for a stay of execution of the decision, to defend its rights and to protect the assets of the people of the Federal Republic of Nigeria,” Mohammed said.
He reassured that the Federal Government would strongly avail itself of all defences customarily afforded to sovereign states under the United Kingdom Sovereign Immunity Act to stave off any enforcement of the award.
He said government was seriously concerned over the “underhanded manner” in which the contract was negotiated and signed, stressing that indications were that the whole process was carried out by some vested interests, which apparently colluded with their local and international conspirators to inflict grave economic injury on Nigeria and its people.
Malami, while explaining inherent element of breaches, drew attention to the fact that by the composition of the parties in the agreement, there were two parties – P&ID and Ministry of Petroleum Resources.
He explained that the Ministry of Petroleum Resources is not a producer of gas, but the international oil companies (IOCs) and perhaps NNPC which were not even carried along in the deal.
“So when you concede, sign and execute a contract to supply gas products without involving IOCs, NNPC as a party in that agreement, how do you intend to execute?” Malami asked.
He said these among others gave rise to insinuations of certain criminal conspiracies right from the conception of the agreement.
“The fact remains that you cannot sign an agreement to provide a product that you do not have. The Federal Ministry of Petroleum Resources does not have oil wells or gas products, so how can the ministry sign an agreement without bringing on board those who are the custodians and producers of the gas products for the purpose of supply?” he asked. “We feel there is need for a comprehensive investigation for the purpose of identifying what undertones are indeed criminal.”
Finance Minister Ahmed noted that considering the huge impact the said judgment debt would have on the economy, the government would do everything possible to ensure it is set aside.
“This matter is a very weighty one. An award of $9.6 billion is equivalent to N3.5 trillion. This amount in our national budget will be covering for us personnel cost, which is about N3.2trn,” Ahmed said.
“This is an award that is unreasonable, excessive and exorbitant, and is also unfair and an assault to every Nigerian. It’s beyond trying to compensate for commercial interest; it’s an assault to each and every Nigerian,” she said.
Ahmed said the Ministry of Finance takes comfort from the efforts so far put in place by the Attorney-General and the Ministry of Justice to ensure that the judgment is set aside because the consequences would be unpleasant for each and every Nigerian.
Also speaking, Emefiele confirmed that P&ID did not at any time import any capital for the oil contract contrary to its claims of investing some $40 million already in the job.
“We have checked our records and we don’t have evidence to show that this company brought in one cent,” he emphasised. “If they (P&ID) have proof of their investment, we are calling on them to please come forward and provide us evidence of how they invested in this country.”
Corroborating Malami’s position that the contract was designed to fail from the beginning, Emefiele stated “this is a time for us Nigerians to be patriotic and rise”.
“If you find a fault with what any governor or minister or any Nigerian has said, you should say it and not to collaborate with people who want to defraud the country,” he said.
Onyinye Nwachukwu & Godsgift Onyedinefu, Abuja
