Nigeria: President Jonathan sacks NNPC's GMD

On 1 August it was announced that President Goodluck Jonathan had dismissed both Nigerian National Petroleum Corporation’s (NNPC) Group Managing Director (GMD), Andrew Yakubu, and Hamidu Namtari, Managing Director of the NNPC’s upstream subsidiary, Nigerian Petroleum Development Company (NPDC).

The President’s special media and publicity adviser, Dr. Reuben Abati, released a statement naming Borno State’s Dr. Joseph Dawha as NNPC’s new GMD and Anambra State’s Anthony Ugonna Muoneke as NPDC’s new GMD. The statement continued that “All the appointments are with immediate effect,” but refused to comment on the reasons behind the dismissals. 

Reports in Nigeria, however, suggest that the dismissals are linked to the allegations by the Central Bank of Nigeria’s former governor, Lamido Sanusi, over the NNPC’s misuse of public funds and an upcoming PWC audit of NNPC finances and revenue losses. 

The statement continued that President Jonathan had approved a further shake-up of NNPC management with Ms. Aisha Mata Abdurrahman reassigned to the corporation’s Commercial and Investment GMD and Dr. Attahiru Yusuf’s appointment as its Business Development Group Executive Director.

This week’s issue of Nigeria Politics & Security and the August issue of Nigeria Focus will provide expert analysis about the changes and the reasons behind them.

Nigeria: Sanusi suspension becomes test of will for Jonathan

Central Bank of Nigeria (CBN) governor Sanusi Lamido Sanusi is challenging his suspension by President Goodluck Jonathan in the courts, and the case is becoming an overwhelmingly political clash as accusations are traded publicly.

Sanusi submitted a 36-point memorandum to Jonathan on 17 March which containing detailed rebuttals of the allegations against him contained in a Financial Reporting Council of Nigeria briefing note.

Jonathan’s February suspension of Sanusi was preceded by earlier attempts to get the governor to resign before the June 2014 end of his term. Initially, Sanusi said that he would not seek reinstatement to his post but would test the constitutional legitimacy of the suspension in court to establish a legal principle.

Having been sent a list of infractions at the bank under his management, Sanusi has analysed them and seems to have changed his strategy. He is now publicly asking Jonathan to reinstate him for the remaining three months of his tenure.

A long political and legal battle looms but it is certain that Jonathan will use every tactic to ensure that Sanusi does not get access to the governor’s office before his tenure formally ends. 

The trend of claims and counter-claims in the dispute suggests that there will not be an independent and credible effort to investigate the basis of Sanusi’s concerns about the Nigerian National Petroleum Corporation, which has been unable to account for failing to transfer some US$49.8 billion in revenues from January 2012 to July 2013 to the CBN accounts.

Acknowledging that he lacks the constitutional power to remove Sanusi from office, Jonathan says the governor is free to return to office once he disproves the ‘acts of financial recklessness’ allegations against him. These supposedly arose from recently received audits of CBN accounts.

Sanusi’s quick response to Jonathan’s allegations was to allege that there was a conspiracy supported by bank chiefs who are unhappy that they would have to open their books to independent auditors so that the missing billions can be tracked.

This view, relating to the role of Nigeria’s banks as likely intermediaries in corrupt flows of funds, has been voiced by Sanusi and other financial experts. Prior to his appointment as CBN governor, Sanusi was chief executive of First Bank Nigeria, through which billions of state oil earnings are transferred between state agencies and other institutions.

Sanusi will meet Justice Gabriel Kolawole later this week when he attends a rescheduled hearing on the case. 

For more news and expert analysis about Nigeria, please see Nigeria Focus and Nigeria Politics & Security.

© 2014 Menas Associates

IOCs and Nigerian Interagency Group wide apart

The refusal of the federal government's Interagency Group
to back down on its plans to use the Petroleum Industry Bill to change the measurement point for crude production for tax purposes has become one of the biggest bones of contention with the international oil industry.

Up to now, Nigeria has made the measurement point the same as the point of transfer for crude, i.e., the terminal. However, Tim Okon, general manager for strategy at the Nigerian National Petroleum Corporation (NNPC) and a leading figure in the Interagency team, has been insisting that it be moved to the point of production, i.e., the field.

The proposed change has massive consequences for the IOCs, in particular in the onshore environment. In effect it means they would be obliged to pay tax and royalties on sometimes substantial volumes of stolen crude that is drawn off between the field and the terminal. A source with one IOC says, 'A loss of 10 per cent is entirely possible and that could make the difference between whether you break even or not in Nigeria.'

For more news and expert analysis about Nigeria, please see Nigeria Focus and Nigeria Politics & Security.

© 2010 Menas Associates

Nigeria: Further personnel changes rumoured

As analysed in recent editions of Nigeria Politics & Security, Petroleum Minister Mrs Deziani Allison-Madueke escaped dismissal in the minor reshuffle on 11th August, despite rumours of her imminent removal. Deputy Finance Minister Remi Babalola was not so lucky, being summarily reassigned to a ministerial backwater following his “unguarded” public comments about the purported insolvency of the Nigerian National Petroleum Corporation (NNPC).

However, this may not be the end of the current struggle for influence in Nigeria's oil hierarchy. Our sources have suggested that the next person in the line of fire may be NNPC Group Managing Director (GMD) Austin Oniwon, upon whose letter to the Federation Account Allocation Committee (FAAC) Babalola's fatal comments were apparently based.

Whether this speculation has any mileage remains moot. However, Menas Associates has noted with interest the increasing behind-the-scenes frustration of the presidency with the slow progress in narrowing the gap between the NNPC's view of the Petroleum Investment Bill (PIB) and the views of the oil industry. Oniwon has been a key figure in the NNPC's uncompromising stance, and has resisted calls from Allison-Madueke to move towards the middle-ground.

While Oniwon's departure might serve the presidency's interests vis-à-vis the PIB, it would further reinforce criticisms of Jonathan's (and Allison-Madueke's) handling of the NNPC: Oniwon took over from Shehu Ladan only four months ago, while Ladan himself had barely spent seven weeks in the position before he was replaced. Sources suggest that Oniwon – an indigene of Kogi State – will be replaced by a GMD from the South-East.

For more news and expert analysis about Nigeria, please see Nigeria Focus and Nigeria Politics & Security.

© 2010 Menas Associates

Gazprom is set to start deepwater operations in Nigeria

Gazprom's chief executive, Alexander Dyukov, has announced that the company is currently in talks to conclude arrangements for a multi-billion oil exploration deal in Nigeria. He said that Gazprom would join Statoil’s deepwater exploration works, as it is looking to catch up with other international companies working in Africa.

Mohammed Bello, managing director of NiGaz Energy, a joint venture between Gazprom and Nigerian National Petroleum Corporation (NNPC), said that the two companies have a vested interest in the Nnwa Doro block, which holds as much as five trillion cubic feet of gas. The negotiations are set to commence sometime next month.

“We are just starting to talk, the board has to decide. We have a meeting next month,” said Bello. Gazprom's oil arm, Gazprom Neft, is also said to be working on joint foreign ventures and intends to begin several projects overseas in the near future. The company’s purpose-devised plan states that Gazprom Neft intends to produce around 100 million metric tonnes of oil by 2020, with about 10 million metric tonnes to be produced abroad.

“We are expanding our production business abroad and planning to join several large foreign projects,” said Dyuko.

According to the company's deputy CEO, Boris Zilbermints, Gazprom also has plans to join Libya's Elephant project.

“We are planning to join the Elephant in late summer but we don’t plan to invest much, except the entry fee because the project has already been launched. We are currently negotiating with several other asset owners in Libya,” he said Zilbermints.

Source: Nigeria Daily Independent

For more news and expert analysis about Nigeria, please see Nigeria Focus and Nigeria Politics & Security.

Nigeria and China in negotiations over an $8 billion oil refinery deal

Nigeria and China are in negotiations over an $8 billion oil refinery, which will be built locally, once the agreement is approved by the Nigerian National Petroleum Corporation (NNPC).

The two countries, agreed to $23 billion of funding to build three new oil refineries and a petrochemical complex in the West African nation, back in early May. The construction of the facilities is aimed to aid Nigeria produce the estimated 750,000 b/d needed to curb imports of refined petroleum products.

At present Nigeria's four existing refineries have a combined capacity of 445,000 b/d, however some are unable to produce maximum output due to ineffective equipment and poor maintenance, which has forced Nigeria to depend on imports to meet its refined-fuel demand.

It is expected that the new refinery could potentially raise Nigeria's refining capacity above 40ml litres of petrol compared with the current capacity of 18ml. The general manager of Greenfield Refineries, Mr Adebayo Ibirogba, said that the deal will be negotiated between NNPC and a delegation of Chinese representatives.

“Although the talks have been exploratory for now, we're positive that a deal can be signed after further discussions with the Chinese who will be in the country by Monday (5th July),” Ibirogba said in an interview.

Source: Nigeria Tribune

For more news and expert analysis about Nigeria, please see Nigeria Focus and Nigeria Politics & Security.