{"id":425685,"date":"2011-05-17T17:05:24","date_gmt":"2011-05-17T17:05:24","guid":{"rendered":"http:\/\/www.ghanamma.net\/2011\/05\/17\/nigeria-oil-deals-missing-links\/"},"modified":"2011-05-17T17:05:24","modified_gmt":"2011-05-17T17:05:24","slug":"nigeria-oil-deals-missing-links","status":"publish","type":"post","link":"https:\/\/www.ghanamma.com\/2011\/05\/17\/nigeria-oil-deals-missing-links\/","title":{"rendered":"Nigeria Oil Deal’s Missing Links"},"content":{"rendered":"
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New Democrat<\/a> (Monrovia)<\/p>\n

Tom Kamara Tuesday<\/p>\n

17 May 2011<\/p>\n

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column<\/p>\n

The controversy surrounding the Nigerian oil deal that greeted it lingers on even after the multi-million dollar deal has become history. Up till now, the exact amount the deal generated is not known, according to the General Auditing Commission. The only amount deposited into state revenue from a deal designed as Nigeria’s help to Liberia, the audit says, is US553, 000 out of an estimated US318m.<\/p>\n

The puzzle therefore remains, although President Ellen Johnson Sirleaf has declared the deal transparent with records available at LPRC to validate this. But we have sought to search for the missing links by taking a look at the audit, the only record there is on this deal.<\/p>\n

The Nigeria oil deal, an arrangement between Liberia and Nigeria, dating from the years of Charles Gyude Bryant to President Ellen Johnson Sirleaf, under whose administration the deal was consummated, again requires more questions and answers as it did from the onset.<\/p>\n

From the beginning, the oil contract was under the clouds of suspicion and secrecy. The Managing Director of the Liberia Petroleum Corporation (LPRC), Mr. Harry A. Greaves, Jr., declared then, and President Sirleaf agreed, that the contract for the oil deal was a private contract not subject to public scrutiny. This led to a series of public demands, with some journalists and others who approached Mr. Greaves claiming a ‘brown envelop’ was offered so that the affair could be forgotten.<\/p>\n

As it is with most issues, it was dead, until recently when the General Auditing Commission (GAC) released its findings on the Liberia Petroleum Refining Corporation (LPRC). Regrettably, Mr. Greaves, in his official reaction, did not tackle the cardinal issues raised. His disappointment is that the audit was published in the newspapers, something he regards as ‘unethical.” Apart from the fact that audits reports are certainly published in many countries without outcries and interference from political leaders, without the publication of LPRC audit, we would have remained blinded on the facts and issues, leading to false conclusions.<\/p>\n

Some facts, although contested, are now available with some revelations. But President Sirleaf has declared that the entire transaction was transparent, and that documents relating to it remain at LPRC to authentic her claim.<\/p>\n

In her place, and with her influence, the President certainly has more information and other details on the deal that led her to issue her verdict. However, as the issue remains active because of the circumstances around it, it is possible that the President will make available to the public documents and other facts that vindicate Mr. Greaves.<\/p>\n

Apart from this, Mr. Greaves has decided to take legal action against the GAC, and this could lead to more facts thrown on the deal during the trial.<\/p>\n

But for now, we must rely on facts and figures available in the government’s official audit in searching for the missing links to determine whether or not the process was transparent. These concern 4 main areas:<\/p>\n

1. The unilateral nature of the transaction<\/strong><\/p>\n

The Government and the Nigeria National Petroleum Corporation entered into the deal. From then onwards, Mr. Greaves took over its implementation. The NNPC (Nigerian National Petroleum Corporation) does not deal with governments, only companies. Mr. Greaves found one.<\/p>\n

Auditors discovered that the former LPRC MD single-handedly and unilaterally picked the Nigerian company, Addax Limited to lift the oil. This unilateralism in the oil deal was not only made an issue by the GAC, but the UN Panel of Experts in its 2006 report. More than that, not even the LPRC Board of Directors was involved in the Nigerian oil decision-making. It was Mr. Greaves’ baby alone, as far as the facts available suggest, and this constitutes clear evidence of ignoring transparency.<\/p>\n

2. No Legal Basis for the Unsigned Contract<\/strong><\/p>\n

“As indicated, NNPC did not sign the oil supply agreement with LPRC and yet permitted the oil to be lifted by Addax on behalf of LPRC. There was therefore no legal basis for Addax to lift the crude oil in the absence of a valid contract that was duly signed and notarized, although NNPC consummated the agreement when it allowed Addax to lift the crude oil,” the audit reveals.<\/p>\n

If transparency was the objective, why was the contract not signed? Did this suggest that the Nigerians, aware of what was happening, were determined to free themselves from any legal liabilities if things broke loose?<\/p>\n

In selecting Addax with any legal grounds since NNPC did not sign the contract, Mr. Greaves, according to records of the audit, did so without concern for procurement regulations such as competitive bidding. Was there, therefore, special interests at work? What were these interests? Where is the transparency, then?<\/p>\n

Responding to his single-handed selection of a lifting company, according to audit records, Mr. Greaves contended that, “he considered the transaction as a sale contract and not procurement, since the Procurement Act “mentioned disposal of assets only”.<\/p>\n

But Auditor General Morlu disagreed, arguing that “since the lifting of the oil constitutes essentially a procurement falling under the International Competitive Bidding process as provided for under the Schedule for Thresholds of the PPC Act, 2005. This process requires that the company selected to lift the oil be determined through an international competitive bidding process, a procedure that was not followed. The 10,000 barrel of crude oil per day was an asset belonging to LPRC, which was subsequently disposed off in an ‘arm length transaction’ with Addax.”<\/p>\n

3. Value of the Deal Mr. Greaves Did Not Know<\/strong><\/p>\n

One of the discoveries of the auditors is that the Nigerian company went beyond the agreed upon crude oil to be lifted without the knowledge of Mr. Greaves, as he told auditors. Moreover, how is it that the Government and people of Liberia received only US553, 000 out of this celebrated deal worth on the surface a little more than US318m. No one knows how much the Government spent on implementing the deal or whether the US553, 000 it received was in fact a loss.<\/p>\n

The audit: “The total quantity of crude oil that the Government of Nigeria through its NPPC agreed to supply to the Government of Liberia through its LPRC was 3,650,000, amounting to 10,000 barrel per day. But through an extended audit procedure, I uncovered that Addax continued to lift crude oil in the name of the Government of Liberia\/LPRC in excess of the agreed upon quantity. The total quantity that was uncovered as being lifted by Addax was 4,652,796 barrels. This means 1,002,796 barrels was lifted in excess of the agreed upon quantity.<\/p>\n

There was no contract, much less a contract modification that would provide the legal basis for Addax to lift the excess in the name of the Government of Liberia\/LPRC.<\/p>\n

Mr. Greaves did not contest the excess 1 million barrels lifted allegedly without his approval and knowledge. He wrote:<\/p>\n

“As regards the two lifting in October 2007, we were not aware of their occurrence. Addax has since confirmed to us that they were able to negotiate the additional liftings, explaining that their failure to notify us was inadvertent and resulted from some personal changes in their organization. They will settle the net amount owed us.<\/p>\n

“When the GAC auditors brought to our attention the fact that an additional cargo was lifted under the contract (of which we were not aware at the time), we contacted Addax who apologized, explaining that this was an oversight resulting from personnel changes within their organization. We reconciled the account and they made the additional payment to LPRC.”<\/p>\n

To this, AG Morlu responded: “This is an unacceptable justification in international business dealings. Addax lifted additional crude oil in the name of the Government of Liberia\/LPRC without an implicit approval or knowledge of LPRC’s management. There was no contract or contract modification presented to support the additional lifting. In the absence of GAC auditors uncovering the additional lifting, there was no evidence provided that Addax was making any efforts to remedy the situation. Management’s argument that LPRC has reconciled the account with Addax does not cure the deficiency noted. This further demonstrated that this “Nigerian Oil Deal” was characterized by a complete lack of transparency, making it difficult to indicate whether value for money was achieved.”<\/p>\n

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See the original article here:
\nNigeria Oil Deal’s Missing Links<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

New Democrat (Monrovia) Tom Kamara Tuesday 17 May 2011 column The controversy surrounding the Nigerian oil deal that greeted it lingers on even after the multi-million dollar deal has become history. Up till now, the exact amount the deal generated is not known, according to the General Auditing Commission. The only amount deposited into state revenue from a deal designed as Nigeria’s help to Liberia, the audit says, is US553, 000 out of an estimated US318m. <\/p>\n","protected":false},"author":0,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"class_list":{"0":"post-425685","1":"post","2":"type-post","3":"status-publish","4":"format-standard","6":"category-business"},"yoast_head":"\nNigeria Oil Deal's Missing Links - Ghanamma.com<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.ghanamma.com\/2011\/05\/17\/nigeria-oil-deals-missing-links\/\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:title\" content=\"Nigeria Oil Deal's Missing Links - Ghanamma.com\" \/>\n<meta name=\"twitter:description\" content=\"New Democrat (Monrovia) Tom Kamara Tuesday 17 May 2011 column The controversy surrounding the Nigerian oil deal that greeted it lingers on even after the multi-million dollar deal has become history. 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