Under the watch of
the smashing oil minister, there was presidential pronouncement to the
Economic and Financial Crimes Commission EFCC, to fish out the oil
thieves. The anti-corruption agency swooped on the NNPC and the PPPRA as
well as the Department of Petroleum Resources (DPR), carting away
volumes of official documents relating to the controversial N1.34
trillion fuel subsidy payments as well as other transactions undertaken
by the agencies. Disingenuously, those who were found to have
shortchanged Nigerians in the fuel subsidy scam are the ones sponsoring
President Jonathan’s re-election campaign.
At the
twilight of 2011, NEXT, one of Nigeria’s most respected newspapers, ran a
series of investigative reports that linked the minister herself to
monumental corruption. The government is yet to act on those allegations
to date! In one of those reports, titled “Oil minister, her jeweller
and their sweetheart deal”, the Minister was said to have discretely
licensed a 47-year-old United States-based Nigerian celebrity jewellery
designer and merchant, to be lifting crude oil.
In
another report also published by NEXT, and entitled “Oil minister in
N2.2b bribery scandal”, the minister’s name was mentioned in an
elaborate scam which forced marketers to pay huge bribes in exchange for
petroleum products import license by the PPPRA. There was also the
allegation that she unilaterally assigned prospecting rights in some
state-owned lucrative blocks to some briefcase companies without open
and competitive bidding.
In the thick of the serious
allegations against Diezani Alison-Madueke for squandering N10 billion
on chartered private jets since assumption of office, which was stoutly
defended in a national television by President Goodluck Jonathan in a
media chat, the son of the petroleum minister was caught frolicking,
partying and quaffing the nation’s resources in a country where 75% of
the population are wallowing in abject poverty!
The
consequences of Diezani’s Chairmanship of the OPEC are manifesting and
damning. OPEC is now helpless, inept and unable to stabilise prices at
its last annual meeting, which is an indication that the free-fall of
oil price has come to stay. To achieve oil price stability, OPEC has to
reduce production so as to address the growing oil glut. Last week, the
Daily Telegraph reported that “Oil will now enter a period of wild price
swings and disorderly trading that will benefit cash-rich Middle East
petro-states such as Saudi Arabia, but will damage some of OPEC’s less
wealthy members such as Nigeria and Venezuela”.
Now oil
price has tumbled by more than 40% since June, when it was $115 a
barrel. It is now below $70. This comes after nearly five years of
stability. At a meeting in Vienna on November 27th the Organisation of
Petroleum Exporting Countries, which controls nearly 40% of the world
market, failed to reach agreement on production curbs, sending the price
tumbling. The countries hardest hit are Nigeria,Venezuela, Russia, Iran.
Chris
Pedersen, the Managing Director of U.S. Operations for Oak Leaf
Training Incorporation gives five reasons oil prices would continue to
slide:
1. The U.S. Oil Boom.
America’s
oil boom is well documented. Shale oil production has grown by roughly 4
million barrels per day (mbpd) since 2008. Imports from OPEC have been
cut in half and for the first time in 30 years, the U.S. has stopped
importing crude from Nigeria.
2. Libya is back. Because
of internal strife, analysts have until recently assumed that Libya’s
output would hover around 150,000-250,000 barrels per day. It turns out
that Libya has sorted out their disruptions much quicker than
anticipated, producing 810,000 barrels per day in September. Libyan
officials told the Wall Street Journal last week that they expect to
produce a million barrels per day by the end of the month and 1.2
million barrels per day by early next year.
3. OPEC Infighting
There
have been numerous reports about the discord between OPEC members,
leading many to believe that OPEC will not be able to rein in production
like it has done in the past. The Saudis and Kuwaitis have reportedly
been in an oil price war, repeatedly lowering their prices in order to
maintain their market share in Asia. John Kingston, the news director at
Platts, believes that the Saudis will not be willing to give up market
share like they have done during previous price drops.
4. Negative European Economic Outlook
European
Central Bank president Mario Draghi has left investors concerned about
the continent’s growth rate which is relatively slow. Germany’s exports
were down 5.8 percent in August, stoking the fears of anxious investors
that the EU’s largest economy had double dipped into recession last
quarter. Across the Eurozone, the IMF again lowered its growth forecast
to 0.8 percent in 2014 and 1.3 percent in 2015.
5. Tepid Asian Demand
Beyond
slow economic growth and currency depreciation, a number of Asian
countries have begun cutting energy subsidies, resulting in higher fuel
costs despite a drop in global oil prices. In 2012, Asia’s top spenders
on energy subsidies, as a percentage of GDP included: Indonesia 3
percent; Thailand 2.6 percent; Vietnam 2.5 percent, Malaysia 2.3
percent, and India 2.3 percent. India is a primary example. Between
2008-2012, India’s diesel demand grew between 6 percent and 11 percent
annually. In January 2013, the country started cutting the subsidies of
diesel. Since then, diesel consumption has plateaued.
Sometime
ago, Dr Ngozi Okonjo-Iweala, the minister of finance and the
coordinating minister of economy told the bewildered nation about oil
bunkering. She said Nigerian state and oil companies are losing a
billion dollars or more a month to oil theft by criminal networks whose
activities have expanded rapidly under the government of President
Goodluck Jonathan. According to Ngozi Okonjo-Iweala, the trade in stolen
oil led to a 17 per cent fall in official oil sales in April, or about
400,000 barrels per day). At average April prices of $121 per barrel,
this results in a loss of $1.2bn!
However, the minister
comes short of telling Nigerians those behind the criminal networks
whose activities have led to milking the nation dry. President Jonathan
blabbed when Christiane Amanpour of CNN cornered him on the oil theft:
“The international countries who buy crude oil from oil bunkerers should
be held accountable for oil theft in Nigeria”! The president refused to
show leadership and put an end to the economic plague. Is it that Mr
Jonathan knows a thing or two about the oil bunkering at the backwaters
of the degraded Niger Delta region?
Those involved in
oil bunkering do not fetch crude oil with bowls or buckets. They do so
with cargo ships, Marine tankers and ocean liners, and they are known.
It’s alleged that MT Patience cargo ships 1-10 that are involved in oil
bunkering at the Forcados Terminal, Brass in Port Harcourt and other oil
producing states in the Niger Delta. These gigantic marine tankers
don’t have wings with which they fly. They are regularly being escorted
by the security apparatus across the coastal lines. Nigeria is Africa’s
largest oil producer, accounting for more than two million barrels per
day. But from investigation, more than 4 million barrels per day are
produced, but only two million is accounted for. Even the Nigeria
Liquefied Gas, NLG is not left out of this bizarre business.
The
Anglo-Dutch oil giant, Shell has severally declared a “force majeure”
on crude oil exports from Nigeria as it struggles to repair sabotaged
pipelines. Shell’s subsidiary consistently blocked crude export lines at
Forcados Terminal in the Western Niger Delta to effect repairs. “Force
majeure” is a legal term releasing a company from contractual
obligations when faced with circumstances beyond its control.
Shell
has blamed repeated oil thefts and sabotage of key pipelines as the
major cause of spills and pollution in the oil-producing region. Crude
oil theft or “bunkering” is a major problem in Nigeria, with estimates
that the country loses some $6 billion (4.3 billion euros) in revenue
every year because of the practice. It’s safe to say that Nigeria
deserves the kind of economy strangulation it faces today. The nation’s
major sources of earnings – mono-economy – is facing incremental
downturn in the international Market. The collapse of oil prices is due
largely to oil theft as we all agreed and other sundry issues.
What
is the solution? Shouldn’t the president show some measure of
leadership and rein in his people? Presidential election is less than 8
weeks away and, Nigerians can’t bank on president Jonathan’s promise to
curb corruption or build new refineries he promised in 2011. He should
show some enthusiasm, even if it is delirium.
•Ikhide writes in from Lagos, Nigeria.
No comments:
Post a Comment