‘Level of deterioration at Port Harcourt refinery shocking’– MD speaks on challenges
Shehu Malami, managing director of Port Harcourt Refining Company (PHRC), says the poor state of infrastructure at the refinery is shocking.
Malami made this known in an interview published in a quarterly publication by the Nigerian National Petroleum Corporation (NNPC).
The PHRC MD who has been at the helm of affairs for almost two years said one of the worst experiences he encountered was an oil spillage caused by the failure of an atmospheric residue storage tank in January.
“The greatest challenge was that of poor state of infrastructure. When I came back to PHRC as managing director, I was shocked at the level of deterioration of the facility,” he said.
“That notwithstanding, we tried to do our best in running the refinery with the help of the top management of NNPC.
“The result of the poor state of infrastructure was that every day we were having one challenge or the other. It is either a heat exchanger is failing or an air fun cooler is leaking, or a pump is bad, and so on.
“The worst failure we experienced was that of the atmosphere residue storage tanks. One failed in January this year spilling a lot of oil in the bund wall surrounding the tank. The second tank failed towards the end of April 2018, but this failure was noticed very early.
“The other challenge has to do with the people; people think they can come here and sit down and you can just package a contract and handover.”
According to him, some units of the refinery had to be shut down because of haulage constraints.
“In the new refinery, the crude distillation unit (CDU) and the vacuum distillation unit (VDU) are available. We were only forced to shut them down because of haulage constraint,” he said.
“The major problem for us is that the catalytic reforming unit (CRU) has not been available for very many years and, although we made every effort to bring back the unit and had the support of top management, especially the COO (Chief Operating Officer) Refineries and the GMD (Group Managing Director), our efforts did not yield the desired result.”
UNDERCOVER: Inside Niger Delta creeks where oil thieves feed fat after bribing soldiers with millions
Nigeria has lost more than N3 trillion to oil thieves in the last two years, according to a report Nigeria Natural Resource Charter (NNRC) released in August. Being an economy dependent on oil, the activities of these saboteurs constitute a major threat to the finance of government. To check oil theft, the government of ex-President Goodluck Jonathan engaged “reformed” militants to protect pipelines. Although, this did not lead to eradication of vandalisation, it reduced the criminal act.
The current administration, however, revoked the contracts and made new arrangements but the creek manors are still having a field day. Operating across hidden islands in the Niger Delta, the oil thieves siphon products from pipelines of oil companies in the middle of the night and refine them before disbursing to willing buyers.
Disguising as a potential buyer and at some point a researcher, FEMI OWOLABI uncovered the operations of the vandals who confessed to rendering security operatives powerless with bribes running into millions of naira.
From the Bille jetty in Port Harcourt, Rivers state, the boat snaked through sleeping rivers to the wavy sea, and after four hours traversing the waters, docked at Kalakurama, an island of about 100 dwellers — mostly fishermen, and those into the business of illegal oil bunkering.
Just a few kilometres after Bille, the largest island on the route, is the heavy presence of security operatives whose uniforms and insignia on gunboats gave out as those from the Nigerian navy. Like the experience with the police on a road journey, boats, when approaching the patrolling naval gunboats would move at slow pace, with passengers’ hands in the air for what can be described as stop and search.
Within this region where the officers are seen, are tens of high pressure pipelines— bearing the Nigeria National Petroleum Corporation (NNPC) brand— running deep into the sea.
“That’s where we get the crude from,” Opusunju, a 35-year-old man who left his driving job for illegal oil bunkering, taps this reporter gently on the shoulder as the boat sailed away from the naval officers’ muzzles.
Curiously raising an eyebrow at Opunsunju to check the possibility of beating these heavily armed security operatives to access the pipelines, he responds with a smile that suggests this, the least of worries for the oil thieves.
WE DO THIS IN THE MIDDLE OF THE NIGHT
Surprisingly, the journey wouldn’t end at the shore of Kalakurama, where teenage boys are tending to a dozen of boats filled with cans, and docked by the island. The boys, whose oily bodies glitter under the mild sun, are conversing in Hausa. Most of them had come from the northern part of Nigeria. They work here under the supervision of those in the illegal business.
“It is from here we start the journey to where we operate,” Opusunju says, as he is welcomed by Patrick, his partner. “Those boys are the ones we use to help load products from our refinery down here,” he adds.
The island, hidden between the waters, Opusunju and Patrick describe as a safe place for their business. Before now, they had operated from an island on the other side of the river, but they moved to Kalakurama when they became targets of security operatives and the original dwellers couldn’t accommodate them anymore.
“Nobody comes here except fishermen who live here and some of us who are into this oil business,” Opusunju says, untying his boat from its anchor. Commercial boats that convey passengers from Port Harcourt stop and turn back at Bille, but only a few would agree to reach Kalakurama. It is from here Opusunju, and others in the business with him, pick their own boats and head for the inlet where the crude oil is being refined. The sun is setting, and as Opusunju ignites the engine of his boat, he hands rain boot and head torch to this reporter.
“We operate in the middle of the night, but I need to go check first if we have products left to be moved.”
The operations are in stages— starting from those who burst the high pressure pipelines to get the crude oil.
“We get the crude from the federal line,” he says, making a note of the pipelines sailed past after Bille.
“There are people who would trace pipes running from under the sea to the flow-station. We then hire highly technical welders who dig deep, open the valves running with the crude oil, and connect our own pipes, diverting the crude to our loading boats.”
A loading boat, he explains, is sometimes big it has capacity to take more than 300,000 litres of the crude.
“You only need a little opening from the valve and the crude starts gushing, because of the pressure, and in one night, we can load six to seven boats. We do this in the middle of the night, because during the day Shell, who has the highest stake, are moving up and down with their chopper, looking after the pipelines.”
When the boats are loaded, the crude oil is then moved to the substandard refineries.
ONLY DIESEL IS PROCESSED, OTHERS WASTE
On fractional distillation of crude oil in a standard refinery, not less than 20 products can be produced, and this include gas, petrol, kerosene, lubricants and asphalts.
The technologies to get the best out of the crude oil, however, are not available to Opusunju and his fellow operators in other creeks the reporter visited. When the crude is brought to their creeks, it is transferred into tanks where it undergoes heating process.
After moving about 30 kilometres away from Kalakurama, Opunsunju pulls the boast over, and with this reporter, he walks carefully through the oily and marshy ground up to where tanks of different sizes are erected.
“This is our own refinery,” he begins.
There is a tank— sitting on what looks like a furnace— that collects the crude oil, and it has pipes running into the next tank that serves as a coolant— supplying water on the running pipes, and from here a lone pipe runs into the third tank that collects the product(s). The tank serving as storage, after each production, would take at least 500,000 litres of the product.
“We put the crude inside this tank we call oven or pot, and this other one water is pumped in to cool these pipes because when the crude is being cooked everywhere gets so hot.”
He explains that after hours of heating, the products are being separated and through the second tank, it comes out from the lone pipe.
“The fuel, kerosene and diesel come out as only one product which is, diesel and the heaviest,” he says.
“There is no way we can separate them, so all of the products will form into diesel, and that’s all we are after.”
After diesel has been extracted, other possible products are discharged through pipes as waste.
Spread all over the area is sediments of asphalts which Opusunju regrets they are left to waste.
“A small sack of this alone sells for N3,000, but nobody is able to come here and we can’t move them out,” he says.
“We leave other products to waste, and it is this diesel we are able to get we load into market boats to sell to waiting customers.”
Sometimes, they get kerosene but in a smaller quantity.
“In a production we may get six or seven drums of kerosene, where diesel is in hundreds of drums.”
THERE ARE MORE THAN 300 REFINING UNITS AROUND HERE
Navigating across the creeks, plumes from afar and near rent the air, and the waters had turned black— it would appear a pool of black oil. Instead of lush vegetation expected of a riverine area, the trees by the banks are dying, and this is traced to the continuous activities of the illegal refining of crude oil.
“Most of the waste we discharge finds their way into the river,” Opusunju gives reason for the contamination.
“You know we have more than 300 units of this kind of refinery here, and most of them have been operating since 2012” he adds.
Along the way, he would stop by some islands to check if they have products.
“Sometimes, if we don’t have enough products, we get from the others and they, too, do come to us when we have in abundance.”
WE WORK WITH NAVY, MARINE POLICE, NSCDC AND THE ARMY
The area is not easily accessible to those who are not in the know of the business. This reporter had posed as a potential buyer who wants the product in large quantity, and it took days of back and forth discussions before an agreement was reached.
At short intervals as he sails, Opusunju brings out his telephone to make calls, and he is heard asking, “is the coast clear?”
After two weeks that he has been out of the creeks, he explains, it is important to keep in touch with those inside so their movement is guided, especially when the news before leaving Bille jetty is that, “new federal troops are on the water”.
“We know those that are there, but when we hear they have brought in new ones, we would try and play safe,” he says.
“You know, this thing we are doing is illegal business and we must be careful,” he admits, saying it is such a profitable business, of course, with its high risks. “It costs about N15 million to set up a refining unit, but in one week of full production, one will make almost a double of the money,” he says.
Things, however, have been running smoothly for them because they have to their side security operatives deployed to watch over the crude oil pipelines.
“We work with navy, marine police, NSCDC and the army. Although, before, it was war, they know us now.”
When a helicopter belonging to the Nigerian navy flies over the water, Opusunju wouldn’t raise his head. he keeps his clam, and laughs. “They see the flames and they know we are illegally cooking crude oil.”
For Opusunju and others, the matter is already handled as long as you ‘settle’ the security operatives.
“We do give the security operatives their own share,” he says. “They will only give you problem when you are greedy, and or you move to the federal line to get crude without putting them in the know.”
To move a loaded barge to and fro, the oil thieves say, they pay up to N1 million to ‘settle’ security operatives on duty. Barges are moved on a weekly basis, giving the operatives an avenue to illegally rake in millions.
ILLEGAL REFINED PRODUCTS DO NOT HAVE THE REQUIRED NUMBERING
Akuma Oji, a technical assistant at the centre for gas refining and petrochemical (CGRP) at the university of Port Harcourt, tells TheCable that they’ve known about the oil theft in the area as far back 2008.
“We felt they take crude, and initially we didn’t know what they do with it,” he explains.
“We later found they take the crude and sell them off. Super tankers from abroad would come and life them to other countries. It was an assumption though, that those people come to buy them at cheaper rate.”
Within 2010 and 2011, Oji says they started noticing how the business of illegal refining of crude was now on the rise. The researchers were carrying out an environmental impact study in the areas where oil companies operate when they saw this.
“We know they used to refine in creeks far from where people are, and the military had always tracked them, destroying the facilities. But recently, the activities are happening even in nearby places and it is like a compromise on the part of the security operatives.”
He explains that the crude oil contains many fractions, and when properly refined, gasoline is obtained from the light end and others from the heavy end.
“But since those in the creeks do not have the separation techniques, they just waste other things after getting diesel.”
Apart from the effect on the environment, Oji says the product from the illegal refineries is not good for engines.
“By blend, this product doesn’t have the required numbering. There are light and heavy diesel, but these guys can’t differentiate, they only keep heating the crude and wouldn’t know when the light diesel had gone.”
In the standard refinery, catalysts are added in the heating process for effective separation of the products.
“Thermal conversion will separate the fractions, and catalytic conversion cause the heavy fractions to turn to light and instead of having those residuals.”
Oji says what illegal refiners are able to get is just about 30% from the whole, and this is, definitely having an effect on Nigeria’s economy.
The academic, however, suggests the way out is for the government to reach an agreement with those involved in the illegality.
“It may be difficult for the government to stop this, because people are daily joining in this business. Even the military guys are taking their own share and using force might not work again. I believe we can train these guys and help them improve.”
In 2017, the government had announced that 10 modular refineries were being developed in Akwa Ibom, Cross River, Delta, Edo and Imo states. With a refining capacity of 300,000 barrels, the government said it would ensure self-sufficiency of petroleum products while serving as a disincentive for illegal refineries and oil pollution.
But the project is yet to see the light of the day.
THE THRIVING BUSINESS
Nigerian refineries are mostly non-functional, and a considerable number of filling stations across Rivers and Bayelsa states rely largely on products from the ‘river.’ Products are loaded in barges, different sizes of boats and moved to the shores in Port Harcourt and other places for delivery.
Tankers come as far as Kano and Kaduna states to get products from the illegal refineries down the south.
“It is always available and cheap,” a tanker driver in Port Harcourt says.
Before leaving for Kalakurama, Opusunju would check on one of his customers around Borokiri area of Port Harcourt whom he says was owing about N2 million, money for products delivered to her weeks ago.
Every corner in Borokiri are stores stocked with these products and transactions are ongoing without interference of police who are expected to check on the illegal activities.
Behind the police station in the Marine Base area of Port Harcourt is a flowing river whose bank serves as another oil trading hub. Strangers, when noticed, are quickly accosted by some teenagers, pulling them to their side, and giving the prices of what they have in stock.
The products here are, mostly, diesel and kerosene.
As early as 7am, a particular model of Toyota Camry cars waits by the riverbank to load products. The products are carefully emptied from the drum into large size nylons, tied and put in the boot.
At the entrance of Okrika town, just opposite the Port Harcourt refinery, is an array of women and men with different sizes of flat-sided containers filled with the products. Motorists, small scale business owners are regular visitors of Hilary, a middle-aged woman whose rack is located by the pipes running into the refinery opposite her.
“We get our supply, mostly from the river,” Hilary says, admitting the products are from illegal refineries
NIGERIA ON THE LOSING END
In August, NNRC disclosed in its report that the country has lost about N3.8 trillion to oil theft within the last two years. It estimated the financial value of what Nigeria has lost to be higher than the country’s 2018 budgets for health and education.
“Over the last decade, oil theft has risen to unprecedented levels, peaking between 2011 and 2014. The inability of the government and oil companies to curb this epidemic has made Nigeria the country most plagues by oil theft in the world,” the report read.
In 2015, Vice-President Yemi Osinbajo had said Nigeria loses about 400, 00 barrels of oil daily to thieves and this amounts to about N4.8 billion. The vice-president had promised that the government would priotise the security of the oil sector, but not much has been achieved.
At a programme in June, Ibe Kachikwu, minister of state for petroleum resources, spoke on the need to check the activities of those perpetrating this act.
“For the fact that vessels can actually come through the security corridors and pick up oil is even much more troubling. It may not have been oil, it may have been arms. Something needs to be done in terms of security and environment as well as the economy of the country.” he had said.
Poverty, unemployment and poor governance, NNRC, in the recent report, identifies as major reasons for the emergence and sustenance of oil theft in Nigeria.
WE WILL INVESTIGATE— NIGERIAN NAVY
While Ndu Ughamadu, NNPC’s spokesman says he would get back to TheCable, Paul Osu, his counterpart at Department of Petroleum Resources (DPR) wasn’t reachable.
Both Omoni Nnamdi, police spokesman in Rivers state and Emmanuel Okeh, spokesman of the Nigeria Security and Civil Defence Corps couldn’t be reached as their telephone lines were switched off.
Ayo Olugbode, the navy’s spokesman, however, says the illegal activities will be investigated.
“We have always been on the look for those into the illegal bunkering,” he tells TheCable.
“When we have information on the exact location, we will move in and get them. It is not true that the authorities help these oil thieves. It is always in the media that we are arresting them. With this information, we will get on this and I assure you they will be dealt with.”
Court sends Shell MD to prison
A federal high court in Port Harcourt, Rivers state, has sentenced Osagie Okunbor, managing director of Shell Petroleum Development Company (SPDC) to prison.
On Tuesday, George Omeriji, a judge, ordered that Okunbor and two high-ranking legal staff of SPDC be remanded for three months over an alleged contempt of a 2008 court judgment that challenged the company’s right to use lands at the Bonny oil export terminal in Rivers state.
SPDC operates a joint venture with the Nigerian National Petroleum Corporation (NNPC) at the terminal where Nigeria’s premier crude grade, the Bonny Light is exported from.
Reacting to the court judgement, the oil giant said all disputes related to land usage at the Bonny terminal had been “amicably resolved” with the landlord families” involved in the case.
“We do not accept that SPDC has disobeyed any lawful order of court and have accordingly appealed this judgement,” Bamidele Odugbesan, SPDC spokesman, said in a statement.
“SPDC has utmost respect for the courts and the laws of Nigeria. As stated above, the landlord families settled with SPDC in 2014 and collected all rents due on the land up to 2019.
“SPDC takes seriously the personal liberty of its officers and also the threat to continuing operations at the Bonny Oil Terminal, a critical national asset in which the Federal Government holds 55 percent interest.
“For this reason, SPDC has taken all lawful steps to protect its officials and ensure uninterrupted operations at the terminal in the interest of the nation.”
Kachikwu: Buhari is not against PIB
Ibe Kachikwu, minister of state for petroleum resources, says President Muhammadu Buhari is not opposed to the implementation of the petroleum industry bill (PIB).
Speaking on Thursday at the ground-breaking ceremony for construction of the 5,000 barrel per day (bpd)capacity modular refinery by Walter Smith Petrochemical Limited, in Imo, the minister said Buhari is only being careful to ensure that areas of concerns are addressed.
“The president’s disposition is not that the PIB will not see the light of the day. That is not true. His position is that there are concerns that it works; that we need to make it comfortable,” Kachikwu said.
“We, therefore, need to persevere and encourage the National Assembly to continue to work on it to make it comfortable for the ‘Big Man’ to sign.”
The president had declined assent to the bill for “legal and constitutional reasons” according to Ita Enang, his legislative aide.
Kachikwu also said it would be a sad case if Nigeria is still importing her fuel by the end of 2019, a softer remark than his 2017 statement.
In an interview, the minister had said he would resign if he does not deliver on his promise of making Nigeria self-sufficient in crude refining by 2019.
“It would be sad if by the end of 2019 we are still importing fuel from abroad,” he said.
“So, we are committed to repairing the refineries; by that, we can at least process about 500,000 barrels of crude per day.
“The policy of this administration is: ‘go back to refining about 20 percent of our crude which will move to 50 per cent in the next five years’.”
Simi Wabote, executive secretary, Nigerian Content Development and Monitoring Board (NCDMB) said the board invested $10 million as an equity partner in the project.
NNPC reports $416m from June crude sales
The Nigerian National Petroleum Corporation (NNPC) says it realised $416.07 million from crude oil and gas export in June, a figure that is 35.78% higher than July sales.
These details were contained in the June 2018 edition of the corporation’s monthly financial and operations report.
NNPC said crude oil export sales contributed $274.95 million, 66% of the dollar transactions while gas sales amounted to $141.12 million.
According to the 35th edition of NNPC’s report, 744 million standard cubic feet of gas per day (mmscfd) was delivered to gas-fired power plants to generate 2,970MW.
“During the period under review, Production from Joint Ventures (JVs), Production Sharing Contracts (PSCs) and Nigerian Petroleum Development Company (NPDC) contributed about 69.35 per cent, 21.77 per cent and 8.88 per cent respectively, to the total national gas production,” a statement by Ndu Ughamadu, NNPC’s group general manager, group public affairs division read.
“The gas flare rate was 10.33 per cent for the month under review, that is, 721.83mmscfd, compared with the average gas flare rate of 10.4per cent, that is, 813.37mmscfd for June 2017 to June 2018.”
The corporation said it supplied 1,194.93million litres of petrol into the country through direct-sale-direct-purchase agreements as against the 1,096.45million litres supplied in May.
In total, 205.73 million litres of petrol, diesel and kerosene was produced by domestic refineries compared to the 161.91 million litres produced in May.
NLC strike: NNPC guarantees 37-day petrol supply
The Nigerian National Petroleum Corporation (NNPC) has appealed to Nigerians to resist “panic buying” of petroleum products owing to a planned strike by the Nigeria Labour Congress (NLC).
Maikanti Baru, NNPC group managing director, made the appeal in a statement released on Wednesday.
Baru said there is an abundance of petroleum products that could last for as long as 37 days.
Organised labour had, on Wednesday, declared a total strike after meeting with a government delegation led by Chris Ngige, minister of labour, was reported to have ended in a stalemate.
Labour had protested the delay in implementing the new minimum wage for workers after demanding an upward review from N18,000 to between N64,000.
“All the NNPC’s depots across the country, including the private ones engaged by the corporation on throughout basis, have an abundance of petroleum products to meet the needs of Nigerians,” the statement read.
“All NNPC depot managers have been instructed to intensify products loading and other activities in their depots to avert any fallout of developments in respect of the NLC’s proposed strike.
“The NNPC would continue to meet the products consumption needs of all Nigerians wherever they may be within the shores of the country.”
NNPC director: OPEC’s re-balancing efforts is limited
Mele Kyari, group general manager, crude oil marketing division, Nigerian National Petroleum Corporation (NNPC), says efforts being made by the Organisation of Petroleum Exporting Countries (OPEC) to re-balance the oil market is limited.
Speaking on Wednesday during the launch of the Egina crude grade at the Asia Pacific Petroleum Conference (APPEC) in Singapore, Kyari said OPEC’s effort is limited by its spare capacity.
According to the Energy Information Administration (EIA), spare capacity is the volume of production that can be brought on within 30 days and sustained for at least 90 days to manage the market.
The oil cartel’s spare capacity is currently found in Saudi Arabia, the UAE, Kuwait, and Russia.
“It’s obvious that if you have high prices it’ll affect demand, so you have to do some market balance,” he told Reuters
“OPEC will do everything to stabilise, to balance the market but I’m sure you’re also aware that there’s a limit to what they can do. You must have the spare capacity.”
Kyari said Nigeria plans to increase its crude output by 100,000 barrels per day (bpd) by the end of 2018 with production at the Egina ultra-deepwater field.
The oil field is projected to raise Nigeria’s crude oil production by 200,000bpd, approximately 10% of the country’s total oil output.
Brent crude futures, the global oil benchmark has topped the $80 dollar mark since Monday, climbing to $82.18 barrel per litre.
Edwin Clark: Shell must divest OML 25 to an indigenous firm
Edwin Clark, leader of the Pan Niger Delta Forum (PANDEF), says Shell must divest its ownership of OML 25, otherwise known as Belema oil field, to an indigenous firm.
Addressing a press conference on Monday, Clark opposed the sale of the field to Chrester Nigeria Limited and asked the federal government to grant Niger Delta indigenes and the Niger Delta state governments the right of first refusal in the renewal and award of oil licenses.
“Over the years, International Oil Companies exemplified by Shell have not only exploited the resources and degraded our lands; they are also taking advantage of the people, inducing unnecessary crisis and conflicts,” the elder statesman said.
“Host communities of OML 25, otherwise known as Belema, Offinama, Ngeje, Kilama, Diaba, Okoama, amongst others and the entire Kula Kingdom have resolved that SPDC must divest OML 25 to an indigenous firm.”
“SPDC must therefore put on hold any planned sale of OML 25 in the overall interest of peace and stability of the Niger Delta Region.”
Clark said granting rights to an indigenous firm or the states in the region would positively impact on the social and economic prosperity of the region and the country as a whole.
Clark accused SPDC of failing to honour its agreement with the host communities of OML 25, noting that it instead sold some of the flow stations in 2014 and was presently planning to sell the Belema Gas Station to Chrester Nigeria Ltd.
“SPDC must produce the report of pre-environmental impact assessment carried out before their operations and post-impact assessment to determine the state of the environment.
“This will be done in partnership with UN Environmental Protection Agency, the communities, the State and the Federal Government environmental agencies, PANDEF and SPDC.”
Oil hits four-year high as OPEC, allies maintain supply cut
Brent crude, the global oil benchmark, rose to $80.87 on Monday to mark its highest level since November 2014.
The 2.835% rise is attributable to the agreement reached by the Organisation of Petroleum Exporting Countries (OPEC) and its allies to maintain supply cuts.
OPEC and non-OPEC producers reached the agreement at its 10th Joint Ministerial Monitoring Committee (JMMC) in Algeria on Sunday, despite US President Donald Trump’s repeated calls for lower prices.
West Texas Intermediate (WTI) also gained 2.13% to $72.29, its highest level since June.
In a statement on its website, the cartel said it was satisfied “regarding the current oil-market outlook, with an overall healthy balance between supply and demand.”
In a speech, Mohammad Barkindo, OPEC secretary general, said the organisation would “work hard to ensure a sustainable stability in the global oil market, enabling steady and lasting economic growth across consuming and producing countries.”
Trump has called out OPEC publicly, saying the cartel should induce lower prices by boosting production.
“We protect the countries of the Middle East, they would not be safe for very long without us, and yet they continue to push for higher and higher oil prices! We will remember. The OPEC monopoly must get prices down now!” Trump tweeted on September 20.
We protect the countries of the Middle East, they would not be safe for very long without us, and yet they continue to push for higher and higher oil prices! We will remember. The OPEC monopoly must get prices down now!
— Donald J. Trump (@realDonaldTrump) September 20, 2018
OPEC and Russia have capped production by 1.8 million barrels per day since January 2017 to increase prices and end the glut in the market.
Italian court jails middlemen involved in Malabu deal
A Milan court has sentenced Emeka Obi, a Nigerian and Gianluca Di Nardo, an Italian, to a four-year jail term for their complicity in a bribery scandal linked to the sale of OPL 245 in 2011.
Quoting a legal source, Reuters reported that Obi and Di Nardo were sentenced on Thursday.
Both men were said to be closely linked to Dan Etete, former minister of petroleum resources, who allegedly engineered the sale of the oil block to Shell and Eni under shady circumstances.
From the $1.3 billion sale of the oil field, $1.1 billion went to Malabu, the original owners.
The accused parties had requested a fast-track of the trial, which may likely have fetched them a reduced sentence.
In a twist crucial to the case, however, authorities raided an apartment in Geneva, Switzerland and discovered a briefcase belonging to Obi, who had received over a hundred million dollars from the deal.
Di Nardo was said to have been rewarded as much as $24 million for linking Obi with executives at Eni.
During the raid, Swiss prosecutors were said to have retrieved a laptop, two Nigerian passports, five sim cards and a hard drive containing 41,000 documents, Uk’s Independent reported.
The Malabu oil deal is one of the most controversial cases in the global oil and gas industry.
But in a statement, Shell denied its involvement in the deal.
“Based on our review of the Prosecutor of Milan’s file and all of the information and facts available to us, we do not believe that there is a basis to convict Shell or any of its former employees,” the statement read.
“If the evidence ultimately proves that improper payments were made by Malabu or others to then current government officials in exchange for improper conduct relating to the 2011 settlement of the long standing legal disputes, it is Shell’s position that none of those payments was made with its knowledge, authorisation or on its behalf.
“We believe the trial judges in Italy will conclude that there is no case against Shell or its former employees.”