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Senate names Total, Petrobas, CNOOC, others in multi-billion dollars scam



The Senate has decried the inadequacies of International Oil Companies (IOCs) in remitting substantial revenue to the Federal Government.

This is in tandem with shortfalls relating to the Egina Oil field and other related projects.

Egina Oil-field project conceived in 2008 is a deep offshore field comprising of a Floating Production Storage and Offloading Vessel (FPSO) and  an Oil Offloading Terminal and Subsea Production.

It was developed by Total Exploration and Production Nigeria limited (24%) in partnership with CNOOC Energy Nigeria Limited (45%), Petrobras (16%) Sapetro (15%), to contribute an estimated 200.000 barrels of oil per day to the Nigerian daily oil production.

The project was expected to comply with the provisions of the Nigerian Oil and Gas Industry Content Development Act of 2010 by awarding required equivalent contracts to indigenous Nigerian companies; engaging local manpower and providing adequate manpower training/development programmes to the Nigerian workforce as well as ensuring the needed technology and knowledge transfer, proportionate to the overall project value and scope.

The project was estimated to cost USD6 billion but has undergone several cost variations that currently put its cost at over USD16.352 billion today.

However, its costs components have been reviewed twice from the initial USD 6billion (approximately) budget, once to USD 13 billion and more recently to USD 16.352 billion (approximately).

These local content elements as well as the cost variations of the project have been subject to several petitions and queries over the years of monumental fraud and acts of disregard for the NOGICD Act.

Other similar deep offshore oil field projects like the Egina oil field is Bonga South west and Zaba Zaba which have been stated to have serious local content implications by IOCs with sharp differing costs and variation.

Egina oil field has a life span of 25 years while the other two have 20 years life span respectively.

Speaking on this, the mover of the motion Sen. Adeola Olamilekan (APC, Lagos) on Tuesday stated that Nigeria may be perpetually in debt at the end of 25 years lifespan of these projects without any benefit.

Olamilekan expressing concern said: “My fear about these three projects is that the structure is not in the overall interest of Nigeria. I want to mention to my colleagues that while the first project is to cost $15. 5 billion, the next project of 450,000 barrels is to cost Nigeria $10billion while third project of the same capacity is to cost $ 6.5 billion.”

Speaking in contribution is Sen. Abdul fatai Buhari (APC, Oyo) who revealed the content of the meeting held with some of the IOCs.

Buhari said: “Yesterday when we had interaction with the various organizations concerned. We came across some important issues that we need to discuss here. The contract was signed for 20 years, they have already spent 12 years, the question we asked, is if they have recouped back their initial capital which they agreed.

“I told them that within the first 8 years, you have recouped back your capital; we now asked them what are you giving the federal government from the excess money you are now having? They said they were investing some certain money. So we asked where the document you are investing is? Nothing to show the committee.

“Yesterday, again, one of the agents was showing us a film. After he got to the third step, he showed where they were pumping gas into LNG and we asked what is the quantity of the gas you are pumping and how much volume you are being given and who are they giving the money to.

“He could not answer that one too. He said it was a sharing formula. We asked how much they are giving the Federal government from the money they are getting, they could not say. We need to go into the nitty-gritty and find out what is happening.”

Also addressing the issue was the Minority leader of the Senate, Godswill Akpabio (PDP, Akwa-Ibom) who described the oil industry as “very tricky,” saying “the more you look the less you see”.

Akpabio said: “As a matter of fact, when I had a privilege of sitting with them to have a discussion with the first major investment in the off shore industry which was done by Shell it was predicated on 25 years.

“We were shocked they realized their investment between the first 8 years. Still they are still taking the money and operating the contract like it was fresh. So Nigeria was not getting anything out of it.

“We asked them that is it because the contract is still continuous, that there seeing things to be done. I said if you have recovered the initial cost of the contract, how then the federal government is not making money. They said they are refueling and federal government is making 55% from the initial 15% they were supposed to be making.”

The lawmaker who lamented further said: “Now they have recovered and the contracts subsists till 2025 so what they have done is that they have reviewed graciously and given the federal government 55% because of this recession.

“So I said you make 35 % continuously from what you have recovered 8 years ago. From the onset, the contract is supposed to be build operate and transfer. Whether the time has gone or not they ought to transfer the assets to the federal government.

“Sometimes we talk about zero production in oil there is zero returns from NNPC, because of the nature of the contract like this. We must arrest it on time. From the initial cost of 6 billion dollars as at today, they have done variation upon variation they have added about 10 point something billion.”

The Senate then created an adhoc committee to investigate the local content elements and cost variations relating to the Egina Oil field Project and the two related Bongo Southwest and ZabaZaba projects.

The Chairman of the ad hoc committee is Sen. Solomon Adeola, while members include Sen. Godswill Akpabio, Sen. Tayo Alasoadura, Sen. Gershom Bassey.

Other members are: Sen. Kabiru Marafa, Sen. Philip Aduda, Sen. Albert Akpan, Sen. Ahmadu Abubakar, Sen. David Umaru, Sen. Chukwuka Utazi, Sen. Stella Oduah.

The committee is to carry out public hearing; ensure that there are no future changes necessitating further variations of the project cost; ascertain whether the cost variations have direct impact on the project scope and objectives and ensure that the costs variations have the required resultant effects on the local content elements of the projects.

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EFCC to probe Delta Gov. Okowa’s N736m substandard road project



…..As Community Youths Protest Low Standard Job



Information reaching The Witness has revealed that the Economic and Financial Crimes Commission, (EFCC) and the Independent Corrupt Practices and Other Related Offences Commission (ICPC), are set to take over the lingering case of the ongoing substandard road contract awarded to PORTPLUS limited, a marine service company, at the sum of N736, 404, 555.60 by the Delta State government.

It would be recalled that in March, 2017, Delta state governor, Mr. Ifeanyi Okowa, had awarded to Portplus Limited, the contract to construct a three kilometers concrete pavement road with both sides drainages at Ikpide-Irri, a riverine community, Isoko South local government area of Delta state.

The substandard collapsed culvert.

The contract which is said to be a ‘kola-nut’ from the governor to the chairman of Portplus Limited, Mr. Immanuel Omoefe, an indigene of the community is already generating controversy following the substandard work and usage of low quality materials by the contractor, resulting to protest by the locals.

Speaking with our reporter, an EFCC official who does not want his name mentioned confided that, “Please don’t quote me, but I can tell you that the commission has been following stories from online media concerning the contract. We saw in the whole contract elements of fraud especially in the area of execution. We are very must interested in the issue”

One of the culverts being constructed with 10mm rods as against the specified 16mm on the BOQ

According to pur EFCC source, “As we talk, we are talking with the lawyer to the concerned indigenes of the community who petitioned governor Ifeanyi Okowa on the substandard work and he is cooperating with us.

“Once we receive the petitions been expected, our Benin city office in Edo state will swing into action and all names that will be mentioned especially the contractor would be invited for questioning. A colleague of mine in the ICPC told me too they are interested and will also step into the matter.”, Our EFCC source disclosed.

The concerned indigenes of the community through a petition addressed to governor Okowa last week and signed by their counsel, Mr. Chuks. F. Ebu, had raised the alarm of substandard job by the contractor saying that instead of construction of both sides drainages, using of rods and other materials specified in the Bill Of Quantity, (BOQ), the contractor went for substandard materials.

The 10mm used to construct one of the culverts.

The petition which was made available to tbis medium, copied the Commissioner of Police, state commissioner for works, member representing constituency 1 in the state house of Assembly, Orezi Esievo, State Director, SSS, Chairman, Isoko South local government area, all branch chairmen of Ikpide-Irri unions, President General, Isoko Development Union, (IDU) and others.

According to the petition with the title “Re:Construction Of Ikpide-Irri Township Roads: Protest Against The Substandard Job And Call For Strict Adherence To The Bill Of Quantity.”, failure by the contractor to adhere strictly to the Bill of Engineering Measurement and Evaluation, ( BEME), the BOQ and other contract papers, the Economic and Financial Crimes Commission, (EFCC) and other anti-graft agencies would be invited into the contract.

“That the culverts should be reconstructed because the converts construction was not met as rods used was 10mm at interval of 300mm instead of 16mm at interval of 150mm spacing specified in the drawings and the original Bill Of Quantity (BOQ) and concrete mixed was very poor. Also the size specified in the drawings was not professionally followed.”

Our correspondent reliably gathered that few days ago one of the controversial culverts carrying 10mm rods as against the specified 16mm collapsed during a visit by some persons from the Ministry of works.

Meanwhile, the community youths on Sunday staged a peaceful protest in the community and called on the contractor to as a matter of urgency and importance follow standards in the execution of the contract or be ready to face the music of the Economic and Financial Crimes Commission, (EFCC) and the Independent Corrupt Practices and Other Related Offences Commission (ICPC).

Speaking during the protest, the leader of the protest, an activist and indigene of the community who doubles as the President of Isoko Monitoring Group, (IMG), a Pan Isoko group known for championing of development in Isoko, Delta and beyond, Mr. Sebastine Agbefe, lamented the substandard work by Portplus limited and called on the contractor to immediately destroy and reconstruct all the culverts in the community that were done with 10mm instead of 16mm according to the BOQ.

“This is a fraud of the highest order, this is pure wickedness and we can no longer folds our arms and watch one man shortchange us because of his personal greed and selfishness. We are warning the contractor to destroy all the culverts done with 10mm and reconstruct same with 16mm according to the BOQ.

“The contractor should also make sure that both sides drainages are constructed on the road and must use standard materials specified on the BOQ. And again, Portplus must adhere strictly to the specifications on the BOQ and any attempt to compromise standards as far as this contract is concerned, Portplus will be made to face EFCC and ICPC.”, Mr. Agbefe stated.

The IMG president, however enjoined indigenes of the community, especially the youths not to take the laws into their hands even as he challenge all communities in Isoko nation to be involved in the monitoring of execution government projects in their various domains.

It was gathered that some of the youths and other indigenes who came out enmass were scared away from the protest by parents and relatives for fear of been victimized by power that be in the community that is already compromised by the contractor.

Our correspondent reliably learnt that video clips and photographs of the substandard work taken during the protest will be sent to the Economic and Financial Crimes Commission, (EFCC) and the Independent Corrupt Practices and Other Related Offences Commission (ICPC) as requested.

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How DMO DG, Oniha’s management style is killing Nigeria’s economy



-As financial experts call for her sack

By Festus Onajite

Nigeria’s economy is heading for more tough times ahead going by current happenstances at the Debt Management Office, DMO, manned by Ms. Patience Oniha.

There have been red alerts pointing towards a major crisis in the Nigerian economy since Oniha took over about a year ago from Dr. Abraham Nwankwo as the director-general. And despite the several millions of naira allocated to the agency, DMO itself is presently a shadow of its old self due largely to the perceived incompetence of the current DG.

The major worry at the moment is that despite the rising debt profile of the nation, the federal government has been unable to develop a fresh debt management strategy, seven months after the expiration of the Debt Management Office’s (DMO) five-year Third Strategic Plan initiated by Oniha’s predecessor.

Investigations also revealed that DMO is bereft of its own internal working plan, which we learnt, is in the pipeline.

Nigeria’s total public debt increased by 4.52 per cent in the first three months of 2018, the DMO had revealed, adding that the country’s debt increased from N21.73 trillion in December 2017 to N22.71 trillion at the end of the first quarter of 2018.

Financial experts attribute the above trend to lack of administrative skills exhibited by Ms Patience Oniha in handling affairs at the DMO. It is further argued that if no drastic steps are taken by the federal government concerning the Debt Management Office, the Nigerian economy risks a further nosedive in a few months to come.

“She is an analogue administrator who cannot operate in the digital age of debt management,” a financial expert quipped recently. He called for the sack of the director-general to be replaced by a more competent and experienced hand to manage an agency as strategic as the DMO.

As it stands, the prospect of the debt portfolio has become higher as Nigeria has just signed an agreement with France for $475million loan facility for some projects in Lagos, Kano and Ogun States.

The Debt Management Agency is a very critical arm of the federal government as far as debt management is concerned. Section 6(c) of the DMO Establishment Act 2003 states that the agency must, “prepare and implement a plan for the efficient management of Nigerian’s external and domestic debt obligations at sustainable levels compatible with desired economic activities for growth and development; and participate in negotiations aimed at realising those objectives.”

Due to its very critical role in the economy, the Debt Management Office has always operated with a strategic plan since it was establishes on 4th October 2000 to centrally coordinate the management of Nigeria’s debt. Its last strategic plan that expired last December was the third since its establishment.

Though the director-general of DMO had said that Nigeria’s steadily rising debt profile was not a big issue, the International Monetary Fund has expressed deep concerns over Nigeria’s capacity to repay its rising debts. IMF officials recently warned the government that Nigeria has been sliding down towards debt trap.

At a press conference on the sidelines of the World Bank Group Spring Meetings in Washington DC, recently Mrs Catherine Pattillo, Assistant Director, Fiscal Affairs Department of IMF, described Nigeria’s debt to revenue ratio, which she put at 63 percent, as “extremely high.”

According to her, “Borrowing by countries can create benefits if used for investments of high returns. Our evidence suggests that’s not the case in some countries, especially in Nigeria. So rising debt can create the vulnerabilities.”

Chirstine Lagarde, the head of International Monetary Fund corroborated this last month while addressing financial leaders from some developing countries. She said that global debt had soared to 220 per cent of global output, a staggering level that did not bode well for member economies.

In most economy, the debt problem was casting a shadow over future growth prospects, she said.

All efforts to reach Ms. Oniha for her angle proved futile as her mobile number 0802..…….79 was not reachable as at press time.

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Customer battles Diamond Bank over N1.5bn fraud



Diamond Bank Plc may have to shell out the princely sum of N2.6 billion if it loses the suit brought against it by a limited liability company Gitto Costruzioni Generali Nigeria Limited. The company which specializes in construction is suing the bank for allegedly mismanaging its accounts domiciled in the bank.
The statement of claim filed by B. A. M Ajibade (SAN) averred that the deponent had sometime in 2004 opened a main account with Diamond Bank to execute construction projects. Moreover, in the course of the normal relationship between bank and customer it was able to secure overdrafts, loans and bank guarantees.
According to a copy of the statement of claim obtained by this newspaper, trouble began when the bank allegedly began to overcharge the company’s main account with sundry levies including Commission on Turnover (COT), lending fees, bank guarantee fees, transfer fees and interest on loans in a manner contrary to the written agreements the company had earlier signed with the bank.
The statement claimed further that an audit of the company’s accounts revealed that it had been overcharged to the tune of N1.5 billion by Diamond Bank. It further claimed that Diamond Bank voluntarily admitted to having charged excessively to the tune of about N246 million.
The company further claimed that the uncertainty surrounding its accounts with Diamond Bank and the bank’s withdrawal of funds from its accounts through illicit charges caused cash flow problems and delays for the company and contributed to the company’s inability to execute some major projects, including the Akwa Ibom Airport, in a timely and efficient manner.
It is therefore claiming N564 million in damages for loss of profit, N1 billion in special damages for consequential loss, another 1 billion in general damages for breach of the banker/customer relationship, and an additional N100 million in legal costs.
The suit has been adjourned till 15th of October, 2018 for hearing.
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