OIL AND GAS INDUSTRY
Investigating Corruption In
Nigeria’s Oil and Gas Industry
By: Sunday Dare
News Digest International Magazine
FACT FILE:NIGERIA-OIL AND GAS
A. 6th largest producer of oil on the world
B.5th largest supplier to the USA, providing about 15 per cent of USsupplies
C.Africa’s leading oil producer for decades, overtaken 2-months ago byAngola.
D.Nigeria produces about 1.2 million barrels of oil per day (this hasdropped dramatically to about half)
E.Nigeria earns about $24 billion dollars annually from its Oil sector
F. Nigeria’s Oil and Gas industry is a heaven of corruption (allstakeholders have been involved in one form of corruption oranother)
G. About 4 major oil multi-national companies are in joint venturepartnership with Nigeria’s national oil company, NNPC
H. The three major shareholders in the oil sector are: Nigeriangovernment, Oil Multi-nationals (Chevron, Shell, Exxon Mobil andTexaco) and the Niger Delta people.
CONTINUE-FACT FILE:NIGERIA-OIL AND GAS
I. Nigeria’s remains one of the six mostcorrupt countries in the worldaccording to TI rating. (Corruption isfueled by wealth from oil industry
J. Nigeria has one of the largest reservesof Natural Gas (LNG) in the world. (Ithas been flared for decades, now it isbeen harnessed for commercialpurposes)
INTERNATIONAL CONNECTION
CORRUPTION IS A DIFFICULTPROBLEM FOR AN ENERGYINDUSTRY BASED OVERSEASESPECIALLY IN DEALING WITHA COUNTRY LIKE NIGERIAWITH ITS REPUTATION FORCORRUPTION
FACT FILE :NIGERIA GAS
-Nigeria has the 10th largest proven reserves ofNatural Gas (LNG) in the world.
-Nigeria is believed to at present have more Gasreserves than oil. About 160 trillion cubic feet.Will last 109 years.
-Current annual production figure is 17 million tonsper year
-USA is expected to provide the biggest market forNigeria’s LNG and the world’s leading GASexporter in 5-6 years
CORRUPTION IN NIGERIA’S GASINDUSTRY
-In a rush to build gas plants and infrastructure to packageNigeria’s gas for the export market corruption has rearedits head. The project commenced in 1999
-A $4 BILLION gas plant has been conceived to be built onBonny Island off Nigeria’s coast
-Contract was awarded to a group of international companiesnotable among which was a subsidiary of Halliburton, anAmerican company.
-Halliburton and top Nigerian oil officials currently underinvestigation for bribery scandal to the tune of $137million.
-Consultancy- total $137 million reportedly paid out toNigerian officials and foreign consultants in order toavoid competitive bidding.
CORRUPTION IN NIGERIA’S GASINDUSTRY –cont’d
-Jeffery Tessler, the foreign consultant hired by Halliburtonwas paid $32.5 million for his brief, which was “…tomaintain favorable relationships with governmentofficials…”
-After revelations, investigations have commenced by theUS government and Nigeria’s corruption agency, EFCCinto the bribery scandal to win the contracts.
-Construction of the first, second, third and fourth trains ofthe Gas Plant has been completed with the completion ofthe fifth train near jeopardy due to corruption.
MEDIA INVESTIGATIONS:What weare doing and how;
INVESTIGATING THE GASBRIBERY SCANDAL
1-Background- Collecting all relevant materials to development ofNigeria’s Gas industry (Policy papers, history of gas flaring, plans forthe development of the sector)
2-Researching all that has be published or done on the gas corruptionscandal. (NPR did a brilliant series tilted “Promise and Peril” on thegas industry and corruption in Nigeria)
3-Finding all documents relating the to the bids submitted by all foreigncompanies for the construction of the Gas plant.
4-Working with/Interview EFCC officials who have been involved in theinvestigation in the last two years and secure relevant documents.
5-Finding the case files for each of the people and company underinvestigation (from Nigeria’s Economic and Financial CrimeCommission, EFCC)
6-Halliburton: Identifying LNG Nigeria’s officials and cabinet ministersinvolved in the final decision to give Halliburton the contract, howthey got and how the money was paid out.
INVESTIGATING THE GASBRIBERY SCANDAL –cont’d
7-Perusing records of all oil and gas contracts handled by Halliburton in Africawith a view to finding a pattern of payoffs or skipping competitive bidding
8-Following the money-Find out to whom and which bank accounts (local andforeign) the bribe monies was paid into.
9-Interviewing/investigating all those connected with the bribery scandal
10-Background check on Jeffery Tesler, Halliburton’s consultant who handledthe slush payments. Seek to interview him.
11-Halliburton-digging into their work in Africa. Zero in on the Nigerian Gasplant contract and interview Halliburton officials. Find out Dick Cheney’srole in all of this since the pay out happened under his watch.
12-USA- get information and interviews with US officials handling the case.Visit the website of SEC to see the filings of Halliburton. Reveal informationabout US laws against paying bribes overseas in order to secure contracts
13-Most of the corruption/payouts took place outside Nigeria. Find out themodus operandi of such deals, which are very prevalent and involvingseveral African government officials.