Minister of Petroleum Resources Diezani Alison-Madueke spoke on [the president's] behalf at the opening of the 35th edition of the Society of Petroleum Engineers (SPE) Annual International Conference and Exhibition (NAICE) in Abuja.

"Significant national income has been expended so far on price regulation of refined products in the domestic market.

"This significant drain in the national resources has limited government ability to provide a sustainable basis for private sector downstream investment and development."

"Nigeria’s national energy policy recognises the multi-dimensional nature of optimal energy resources management, at the same time, it addresses diverse issues such as energy efficiency, environmental stewardship, research and development, as well as energy pricing and financing along the entire oil and gas value chain."

"The overall thrust of our energy policy is in the optimal utilisation of the nation’s energy resource mix for sustainable development through increase in the pace of oil and gas exploration, development and production, internal sufficiency in petroleum products and export of value added excess as well as liberalisation and deregulation of the downstream sector and progressively privatise the oil and gas industry to bring in private sector efficiency that will engender sustainability,"

"These policy objectives are now actively being pursued in an integrated manner to give impetus to this vital sector of our national economy while modernising its laws to create an appropriate institutional framework for the implementation of the policy."

"Government is also focusing on addressing the considerable environmental challenges in the Niger Delta through the adoption of environmentally- friendly technologies in our exploration and production activities because every nation with an important coastline must adopt best practices in its oil and gas activities to safeguard aquatic ecology of the coastline which many of our communities are dependent on, the recent BP disaster in the Gulf of Mexico is an important warning signal to Nigeria and lessons learnt from the incident must be shared especially through professional bodies like the SPE. "

u can imagine, by John Ikya

Brace up Nigeria!

A household that cultivates and produces cassava but has to buy and pay for garri just like any other household that doesn't produce cassava will be a shameless, lazy and cursed household.

It is to the shame of Nigeria's leaders that Singapore without any type of natural oil deposit, refines and exports petroleum products and here we are watching Nigerians wait endlessly under the sun, flogged and humiliated by soldiers just to buy kerosene that we should have excess of and sometimes the waiting is all in vain.

The day we have a President that will sit down here(not interested in going to Washington to pose for picture with Obama), decide to work(not on tenure elongation and needless constitutional amendments), give out jobs(that impact directly on the needs of the suffering masses), directly supervise those projects and demand results and refuse excuses then all these shameless cries about the over flogged 'subsidy' rant will stop.

Making our refineries work is made to look as if it's an unachievable goal and yet other nations without crude have refineries that are always in top shape.
Nigerians must resist any attempt to remove subsidy. The Federal Governmet should cut the wastes that running itself vents on the nation and stop targeting the only succor that the masses should have for being in a nation blessed with crude oil and natural gas deposits.

They tell us of subsidy and yet can expend a wooping N7Billion on a needless 50th anniversary to celebrate decades of underdevelopment, unchecked massive lootIng, collapsed infrastructure and inept leadership. They talk of subsidy and yet paid out an average of N200million each to members of the National Assembly just for reporting for 'work' at Abuja. They tell us of subsidy and yet last years budget was hardly implemented and yet the money is nowhere to be found.

Who's deceiving who?

It is poor quality leadership and not subsidy that is draining the economy.

ekt_bear:

He is very correct.

Diezani Allison-Madueke, Former Oil minister, her jeweller and their sweetheart deal

Published 26/06/2011 12:59:00 staff



On April 7, 2010, a day after her appointment as minister for petroleum resources, Diezani Allison-Madueke flew to Beverley Hills in Los Angeles to revel in a lavish party and fashion show put together by Christopher Aire, a United States-based Nigerian celebrity jewellry designer and merchant, whom she met during her 15-month tenure as minister for solid minerals and steel development.

By the time the bejewelled Mrs Alison-Madueke returned home a few days later to assume duties as Nigeria's first female oil minister, she had achieved three clear objectives from the trip - she had unlimited fun, acquired some of Aire's exotic gold and gemstones, and handed Mr Aire an invitation to become one of Nigeria's biggest crude oil lifters.

It was the beginning of a beautiful friendship.


At the time, the 47-year-old Mr Aire had nothing whatever to do with the oil business. His company, Solid 21 Incorporated, dealt strictly in jewellery and timepieces. Those close to him said Mr Aire was content with his jewellery business and had no plan to venture into Nigeria's murky oil waters. But all that changed after his meeting with Mrs Alison-Madueke that fateful April 7.

As the minister was flying home, Mr Aire also kick-started the process of registering brand new companies with which he planned to lift Nigerian crude. On July 9, 2010, the jeweller incorporated Siseno Oil Nigeria Limited, with him and one Patience Iluobe (believed to be his relative) as directors, to carry out the business of petroleum products sales and distribution.

Twelve days later (July 21, 2010), Mr Aire, through his agents, headed again to the Corporate Affairs Commission, where he incorporated another firm, Caligeria Oil Limited, also for the purpose of conducting petroleum products sales and distribution.

This time, one of his US-based companies, Osiri Holdings, Ms Iluobe, and one Otaigbe Onyekwere Agba, were named as directors. Mr Aire also proceeded to incorporate a US version of Caligeria with himself, his bodyguard, Joseph Agbi, and Jivani Davoodian, a Californian lawyer, as directors.

Favourite crude oil lifter

Mr Aire passed the papers of his newly minted companies, which have neither fixed addresses nor personnel, to the Crude Oil Marketing Division of the Nigerian National Petroleum Corporation. Shortly afterwards - a month after the companies were born - Mrs Alison-Madueke discretionally approved the award of crude oil lifting contracts to the two firms, in violation of NNPC guidelines for lifting of Nigerian crude.

She also disregarded the fact that the "briefcase company" had no track record and lacked the ability to perform. According to a stringent guideline released by the NNPC in early 2010, companies which wish to lift Nigerian crude must prove that they are bona fide end users and that they are established and globally recognised large volume traders with evidence of their global network, their activities, and volumes of crude oil handled in the last three years.

Such companies must also provide evidence that they are registered Nigerian companies with operations in Nigeria's oil and gas industry, and must have a minimum annual turnover of at least $100 million and net worth of not less than $40 million.

Applicants are also required to show commitment to the development of the Nigerian economy by investing in any number of opportunities that abound either in the oil industry or gas sector. Besides, successful companies are expected to post a $1 million performance bond through a first class Nigerian bank in addition to the regular crude oil contract provisions.

In the same guideline, the corporation promises transparency, fairness and equity in the contract award processes. "The NNPC further wishes to emphasise that there is absolutely nothing like ‘Presidential', ‘Task Force', ‘Ministerial', ‘Diplomatic' or any other form of special or privileged allocation, which can be peddled by hawkers or anyone," the guideline states.

Mrs Alison-Maduekwe approved this guideline, which was posted on the NNPC's website on June 24, 2010, over a month after she became minister. But by allocating crude oil to Mr Aire's companies without regard for these rules, the then minister, insiders say, demonstrated a penchant for violating laws, including regulations she helped put in place.

Those who should know at the NNPC say Siseno and Caligeria did not meet any of these requirements. In fact, NEXT was able to determine that the companies do not have fixed addresses or personnel in Nigeria. Caligeria has Plot G19, House 34, Dan Alhaji Road, Barnawa, Kaduna, as its registered address. Siseno, on the other hand, listed Dollar Shop at the Transcorp Hilton Hotel in Abuja as its operational address.

But visits to those addresses showed that these companies never operated out of those locations. Plot G19, House 34, in Kaduna is an unpainted residential bungalow, and residents and neighbours said no company known as Caligeria has ever operated in the building. "Just because their owner knows the minister and hosted her well at his glamorous event in California, the companies are today two of the biggest lifters of Nigeria's crude oil," said a source at the petroleum ministry.

We have learnt that, between them, Mr Aire's two companies lift 60,000 barrels of crude per day, the highest for any established industry player and twice as much as well-known companies such as Addax, Vermont, Oando, Unicorp and others who are allocated 30,000 barrels per day. The government, through the NNPC, subcontracts crude marketing by allocating crude lifting contracts of 30,000 barrel per day; but some traders like Glencore, Travigura, Vitol and Sahara get as much as 60,000 barrels per day.

Nobody got more than the minister's jeweller friend

As usual, Mrs Alison-Madueke declined to state her own side of the story to our reporters. She called off an interview appointment scheduled with our editors for June 13. She also did not return calls and text messages seeking her comments for this story.

Mr Aire did not respond to our enquiries either. When our reporter called his California office, a spokesperson who identified herself as Adriana, requested that questions should be e-mailed directly to her. She did not respond to the email as at the time this newspaper went to print. But the spokesperson of the NNPC, Levi Ajuonoma, rose in stout defence of his organisation, saying the organisation did nothing wrong. "The process for crude oil lifting license is so cumbersome. If you don't meet the requirements, you cannot be approved to lift crude," Mr Ajuonoma said. He confirmed that Caligeria, which he claimed had been around for a long time, got a one-year lifting contract that had since expired. He denied that Siseno was awarded contract to lift crude, saying "there is no such company on my list." But information at our disposal shows otherwise.

Caligeria's registration documents, obtained officially from the Corporate Affairs Commission, indicate that the company was incorporated less than a year ago and has a subsisting contract with the NNPC. High level sources also confirmed to us that Siseno, also less than a year old, is on the list of our country's crude oil traders. With the arbitrary allocations to his no-address companies, Mr Aire and his associates earn about $11 million a year in profit for doing virtually nothing. Crude lifters make about 50 cents a barrel per day, which cumulatively comes to about $30,000 per day in profit for the jeweller-turned-oil magnate.

Typically, what these ‘briefcase companies' do is team up with influential officials such as Mrs Alison-Madueke, lobby for contracts independently, and then sell their allocations to more established traders. Mr Aire's companies also benefitted from Mrs Alison-Madueke's discretional award of contracts for the lifting of products from the Oso condensate (an extra light Nigerian hydrocarbon) and the Escravos liquefied petroleum gas terminal. Our sources said Caligeria lifts 45,000 metric tonnes of condensate, while Siseno gets 30,000 metric tonnes of LPG from Escravos. Industry insiders said profit from this also runs into several millions of dollars.

Some industry operators described the obvious in calling Mr Aire's a "sweetheart deal". "We just can't understand why briefcase companies without any track record became Diezani's most favourite companies to lift crude oil," said one highly placed source in the petroleum ministry, who did not want to be named for fear of reprisal. "This is the highest level of arbitrariness and corruption I have ever seen, and this woman must be made to answer questions," the source said.

Allison-Madueke's bazaar

Arbitrary awards of crude lifting contracts to obscure companies is indicative of the corruption in the oil industry, which allegedly skyrocketed during the tenure of Mrs Allison-Madueke to a degree last seen during the Sani Abacha administration. Insiders said that during her tenure, awards of contracts were characterised by bribery of top politicians, cronyism in allocation and indirect ownership in some of the lifters, and payment of huge bribes to high level facilitators within the petroleum ministry and the NNPC.

But this has not stopped Mrs Allison-Madueke, who has alienated the entire industry as well as her cabinet colleagues and senior aides to the president, from lobbying furiously for reappointment. Sources say Mrs Allison-Madueke, who is close to the president, is also opposed by Patience Jonathan, the president's wife.

Despite what appears to be overwhelming opposition, however, insiders still rate Mrs Allison-Madueke's chances high, as the president finalises his list of cabinet ministers for transmission to the Senate this week. Our investigation revealed that apart from Caligeria and Siseno, the former minister also trampled on due process in awarding crude lifting contracts to other companies such as Sullom Voe, Spog, Tempo and Tacomo. Insiders also accuse her of discretionary awards of Escravos liquefied petroleum gas contracts to Addax Energy, Avidor Oil and Gas Limited (believed to have connection to Vitol), Taleveras Business, Accoldis Limited (with connection to Spog), Elan Oil (believed to be another version of Traffigura) Tempo Energy Limited, and Blissfield Enterprises. Yet, the bazaar did not end there.

Mrs Alison-Madueke, our sources further revealed, proceeded to discretionally approve the awards of Oso condensate contracts to Algasco (also linked to Vitol), Optima Energy Services, Theydon Petro SA, Ocean Bed (with connection to Sahara Energy), Mangrove Energy, Havistar Petroleum (linked to Taleveras), Hyson, Ascon limited, Nipco Plc, Vitacan Services Limited, AMG Petro Energy, Energy Resources Management, Ultimate Gas Limited, Tempo Energy, Caligeria Oil Limited, Mez Technical Limited, Messrs Affiliate Global Exchange Limited, and Mezcor SA. Most of these companies have little or no investment in Nigeria, as required by the NNPC guideline for crude oil lifting.

A stench of corruption

The former powerful minister worked through a group of very small, even shadowy, companies that always seem to get the best contracts from the NNPC in the upstream and downstream sectors and on occasion in the services industry.

The tangled web of questionable deals includes last-minute assignment of production rights in five large oil blocks to Septa Energy and the obscure Atlantic Drilling Concept Limited without a public tender. The practices also include the secretive award of kerosene allocations, crude oil allocations, fuel oil allocations, LPG and condensate exports, automotive gas oil and naphtha. Oil traders, according to insiders, regularly pay substantial kickbacks into the offshore accounts of top oil sector executives. Insiders say the Isle of Man has been a favourite jurisdiction for such offshore accounts.

The funds are paid directly into the accounts from outside Nigeria and thus the funds never enter Nigeria and cannot be tracked internally. The funds are often then laundered through real estate purchases. A source familiar with the arrangement said London remains the dominant location where funds are laundered in this fashion.

It is said that since Farida Waziri became the chairperson of the EFCC, the Metropolitan Police had enjoyed zero local co-operation in pursuing such matters. In fact, the source added, when the Met briefs the EFCC on such cases with a view to getting its assistance, elements in the commission promptly informs the target - for a fee of course. Under Mrs Allison-Madueke, all sorts of gaps have been exploited. As at April this year, 600,000 metric tonnes of diesel had been imported, with importers shaken down at a rate of N10 per litre.

We have no evidence that these bribes directly involved the former minister. NEXT had also uncovered an elaborate bribery scam at the Petroleum Product Pricing and Regulatory Agency (PPPRA), where oil marketers were compelled to pay bribes in US dollars in exchange for obtaining authorisation to import gasoline.

Our investigation at the time showed that oil marketers were instructed by PPPRA to call a mobile telephone number and pay a bribe of $8 per metric tonne of petroleum allocated to them, such that a firm with a 100,000 metric tonnes allocation would be required to pay a bribe of $800,000 in cash. We were also able to establish in subsequent investigations that Mrs Alison-Maduekwe appeared to have violated Nigeria's procurement law by quietly signing away operatorship rights in five lucrative oil blocks to two barely established companies.

donspony:

Fuel subsidy is a neccessary evil

Muza:

subsidy will be a drain on our resources if and only if we refine our oil in Nigeria,as long as they continue to sabotage our refinaries and continue to import oil,I'll never see it as a drain on our resources.

If they want to remove subsidy then they shud repair d refineries and better still build new ones,but as long as we import then subsidy must stay or they will be inviting anarchy.

Wallie:

I think the fuel subsidy should be removed generally and should only be given to the needy in form of monthly payments. Think of it as a welfare/safety net system, if you will.

However, it should only be given to people that file their taxes for the current year. For people having zero income, they should still be made to file their taxes declaring zero income. The payments should be graduated for people of different income brackets.

For example:
Salary of NGN 0 – 36K should get 100% of the monthly subsidy payment
Salary of NGN 36.01 – 60K should get 75%
Salary of NGN 60.01 – 75K should get 25%
Salary of NGN 100K plus should get 0%

This way, there is little to no benefit smuggling fuel into neighboring countries and also wasting money subsidizing fuel to the affluent. More taxes revenue will be generated by the government from people wanting State benefits, while making sure that the needy will not surfer.

Emperoh:

Subsidy should be removed, but not after they muist have fixed all the refineries and improved local refining capacity
That way, fuel and other by products will be cheap and easily accessible.

Save this is done, then they should prepare for more wars with NLC!!