A trail of NNPC’s missing billions

*Andrew Yakubu’s $9.7m saga *$3.5bn Egina FPSO project manipulation *$1.6bn NPDC scam; $20bn missing oil revenue

Chuks Isiwu

16 March 2017, Sweetcrude, Lagos – The recent discovery of huge sums of money allegedly belonging to Andrew Yakubu, former Group Managing Director of the Nigerian National Petroleum Corporation, NNPC, at a run-down building in Kaduna is a pointer to the gross corruption at the state-run oil company.
The Economic and Financial Crime Commission, EFCC, had in February seized the alleged loot, totalling $9.7 million and £74,000, from a fire-proof safe in Mr. Yakubu’s guest house situated at Sabon Tasha, Kaduna, following a tip-off by a whistle-blower. Soon after, a court in Kano ordered the forfeiture of the money to the Federal Government at the instance of the EFCC.
Since then, trouble began for Mr. Yakubu. He had been arrested and charged on a six-count money laundering allegations.

Six-count charge
In court papers filed on March 9 at the Federal High Court, Abuja, Yakubu was accused of failing to make full disclosure of the sums of $9,772,800 and £74,000 in the Assets Declaration form he filed at the EFCC on August 18, 2015, contrary to Section 27 (3)(a) of the EFCC Act 2004.
In count three and four of the charge signed by three EFCC prosecutors led by Prince Ben Ikani, the former NNPC boss was alleged to have, between 2012 and 2014, without going through a financial institution, received cash payments of $9,772,800 and £74,000, and thereby committed an offence contrary to section 1 of Money Laundering (Prohibition) Act 2012.
In count five and six, Yakubu was also alleged to have, with intent to avoid a lawful transaction under the law, transferred at various times in Kaduna, aggregate sums of $9,772,800 and £74,000, when he reasonably ought to know that the said funds formed part of the proceed of some form of unlawful activity and thereby committed an offence contrary to section 7(4) (b) (ii) of the Advance Fee Fraud Act, 2006.
Nigerians are still pondering the source of the huge funds, while oil industry watchers, who should know, believe the funds could hardly have come from Yakubu’s earnings in the top-flight positions he occupied between 2005 and 2014 at the NNPC.
His defence that the money was accumulated gifts he received during different ceremonies has hardly changed anything.
Mr. Yakubu, appointed Group Managing Director, GMD, of the NNPC July 1, 2012 – the fourth GMD under the five-year reign of Mrs Diezani Alison-Madueke as Petroleum Resources Minister – was relieved of his duty on August 1, 2014. Between 2005 and 2012, he was Executive Director, ED, at the National Engineering and Technical Company Limited, an NNPC subsidiary; Managing Director, Kaduna Refinery; ED, Refining and Petrochemicals, NNPC; and ED, Exploration and Production, from where he rose to become the GMD.

Massive fraud and corruption at NNPC

Yakubu’s current troubles with the EFCC may well be a confirmation of perennial allegations of massive corruption, sleaze and shady deals widely associated with the NNPC.
As reported by SweetcrudeReports between 2013 and 2015, Yakubu’s tenure, like many before it and after, were characterised by oil-related scandals involving billions of dollars, ranging from contract manipulation, fuel subsidy fraud to missing crude oil revenues.

$3.5bn Egina FPSO project manipulation

The new NNPC boss soon after his appointment became enmeshed in a contract scandal that went as high as the topmost office in the Petroleum Resources Ministry. Acting together with NNPC’s group executive director in charge of exploration and production, Mr. Abiye Membere, and with the tacit support of then Minister of Petroleum Resources, Mrs. Alison-Madueke, Yakubu and his team were alleged to have subverted due process in the award of the contract for the $3.5 billion Floating Production Storage and Offloading, FPSO, for the Egina project.
SweetcrudeReports, in its February 2013 edition, had reported the recommendation of Hyundai Heavy Industries for the project by the team of Total Nigeria; NNPC subsidiary, NAPIMS; and the Nigerian Content Development and Monitoring Board, NCDMB, which together oversaw the tendering process.
Against this recommendation, the NNPC Group Executive Council, GEC, headed by the GMD decided that the project should be awarded to Samsung Heavy Industries, and so it was.
An allegation of $150 million bribe continues to trail this contract award and Yakubu, Membere and the ex-minister are being fingered for subverting the process.

$1.6bn NPDC scam

Industry watchers continue to point to the strange and controversial arrangement under which huge volumes of Nigeria’s crude oil was handed over to certain companies through the Nigerian Petroleum Development Company, NPDC – the exploration and production arm of the NNPC – as a major dark spot in the Yakubu era. Under this arrangement where transparency and accountability were completely thrown overboard, Nigeria is believed to have lost over $1.6 billion to two companies – Atlantic Energy Brass Development Limited and Atlantic Energy Drilling Concept Limited.
The EFCC has since sued for the recovery of this fund from the two companies and NNPC officials who allegedly aided the scam. Yakubu, Membere and two others, were among those charged to court by the EFCC together with Atlantic Energy Brass Development Limited, Atlantic Energy Drilling Concept Limited and Jide Omokore, chairman of the two firms. The case is still in court before Justice Nnamdi Dimgba of the Federal High Court sitting in Maitama, Abuja. But, Yakubu has been dropped as co-defendant and is acting as a prosecution witness.

$20bn missing oil revenue
Between the Central Bank of Nigeria, CBN, and the National Assembly on one hand, and the NNPC on the other, the issue of missing funds have been a rather contentious one. In fact, erstwhile CBN governor, Sanusi Lamido Sanusi, who is the emir of Kano, was sacked after he raised the alarm over tens of billions of dollars of oil revenues that had been unaccounted for by the NNPC between January 2012 and July 2013. SanusI, in a letter to then President Goodluck Jonathan written in September 2013, alleged that the NNPC had diverted the sum of $49.8 billion meant for the Federation Account, amid protestation and denial by the Petroleum Ministry and the Yakubu-led NNPC. Sanusi, after acknowledging that some of the amount in his earlier charge had been clarified through inter-agency reconciliation, later scale this figure down to $20 billion, which was equally disputed by the NNPC and the Ministry.
Probes carried out by external audit firms later hinted of missing oil funds, including $20 billion established for 2014 alone.

Oil subsidy fraud

Mr. Yakubu was appointed NNPC GMD in the aftermaths of the fuel price protest of 2012. He came in at the height of oil subsidy regime when petroleum products importation became a scam. The volume of national fuel consumption became grossly inflated, allowing for all sorts of shady dealings in the process. Shylock petroleum products marketers stole billions of dollars in the name of subsidy, which the NNPC readily approved for payment. At the count, Nigeria is estimated to have lost $32 billion to the fuel subsidy fraud.
According to Senator Bukola Saraki, fake fuel subsidy operators were responsible for one of the most massive frauds in Nigeria’s history. Speaking in 2015, Saraki, who is now President of the Senate, accused then government of giving import licenses to 82 shady companies with the sole purpose of draining money from the Nigerian budget. He estimated yearly losses of $2 billion due to the activity of these bogus firms.

Manipulation of Bonga SW/Aparo development

In yet another case of corruption, NAPIMS, the investment arm of the NNPC, was alleged to have manipulated the Bonga SouthWest/Aparo Unit Field Development Project contract.
SweetcrudeReports had reported how excesses had permeated the very fabric of decency that once ruled the operations of the NNPC. In this case, Jonathan Okehs, then Group General Manager of NAPIMS, had written a letter titled, “Bonga SouthWest/Aparo Unit Field Development Project, EPC 2-Pipelines, Flowlines, Risers & Offshore Installation Services (Approval of Technical Evaluation Result)”, to Shell Nigeria Exploration and Production Company, SNEPCo.
By the letter, NNPC/NAPIMS imposed nine companies that were not originally part of the project at the bid level to execute particular aspects of the project. How and why those companies could become part of the project at that point was unfathomable to industry players.
“It is inconceivable that NAPIMS would seek to impose companies which did not participate in the technical evaluation on a process as a basis for progressing successful bidders to the commercial stage,” an operator had volunteered.
SNEPCo’s hands were tied in this circumstance, and, therefore, it had no option than to admit the nine companies since the order came from NNPC, which is the senior partner in the business. But as was observed by an industry player, the fact that some unknown companies  could by fiat become part of a project mid-way into the process of the project’s execution smacks of outright manipulation and corruption of the highest order. But the NNPC have had its way, SNEPCo obviously had no right to complain.

No date yet for trial
Meanwhile, no date has been fixed for the arraignment of Yakubu over the money laundering charges brought against him by the EFFC, which insists that he cannot be released on bail for now because of the seriousness of the charges against him.
The anti-graft agency told the court that apart from the $9,772,800 and another 74,000 pounds found in his Kaduna house, Yakubu is being held in connection with several cases of corruption brought against him while he held sway as the NNPC boss.
In a counter-affidavit filed in the court to oppose the enforcement of his fundamental rights suit filed against the EFCC, Yakubu was said to be under-going interrogations in other corruption allegations against him.
In the counter affidavit deposed to by one Waziri Adamu Nitte, the EFCC pleaded with the court not to order the release of the applicant in the interest of justice.
The counter-affidavit indicated that the search conducted in Yakubu’s house last month was backed with a valid court order.
The anti-graft agency also averred that contrary to the claim of the applicant the huge foreign currencies found in his house were not gifts but proceeds of crime.
The EFCC said at the time Yakubu was GMD of NNPC, he was a public officer and there were existing laws that barred public officers from accepting that kind of gifts under any guise.
The EFCC further urged the court to disregard the application on the grounds that it was a ploy by the applicant to frustrate investigation into the matter, adding that the applicant would not be prejudiced by the refusal of this application.
However, Yakubu has approached the Abuja division of the Federal High Court for the enforcement of his fundamental rights.
In suit number FHC/ABJ/CS/126/2017 filed on February 20, 2017, by his counsel, Ahmed Raji, the applicant is seeking an order of court directing his immediate release by the EFCC or admitting him to bail on liberal terms to enable him travel overseas for a medical treatment.
The applicant is also seeking an order restraining the respondents both jointly and/or severally, from further detaining him unlawfully, whether for reasons of suspicion or on account of any purported investigation with respect to the allegations wherewith he was detained by the EFCC in breach of his rights to personal liberty, dignity of human person, freedom of movement, private and family life, as enshrined under sections 34(1), (4) and (5), 37 and 41 (1) of the 1999 Constitution (as amended).
The former GMD is also asking the court to compel the respondents to pay him the sum of N1 billion as general damages and compensation for the violation of his rights enshrined under the 1999 Constitution (as amended).

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