. How They Got Their Licenses
Though the Petroleum Industry Bill that seeks to regulate petroleum operations in the country has passed the second reading, Senators and indeed Nigerian have remained divided over the “uneven distribution” of Nigeria’s oil wealth. While the oil producing communities of the Niger Delta continue to groan under the degradation of their environment due to oil exploration, the wealth is being controlled by a very minute part of the nation’s population. Street Journal found out that the unsophisticated sharing of Nigeria’s oil and the wealth that comes with it started in the days of the military.
Street Journal found out that normally, an Oil Prospecting License confers exclusive rights of surface and subsurface exploration for the production of petroleum in an area not more than 1,000 square miles in size. The Oil Prospecting License is normally granted for inland basins for an initial period of 3 years, with the option of renewal for a maximum period of two years.
For the deep water block and frontier basins, the exploration period is 10 years, broken into two five-year periods which automatically roll over unless otherwise withdrawn due to non-performance.
The Oil Mining Lease (OML) on the other hand is granted upon confirmation of potential for economic production of the petroleum from the license. The OML grants exclusive rights to explore, win, produce and carry away petroleum from the relevant area. The regulation size is 1,295 sq km while the specified duration is 20 years. The holder of an Oil Prospecting License (OPL) is entitled to apply for the conversion of an Oil Prospecting License to an Oil Mining License.
Street Journal’s investigations revealed that at a point, oil blocks were awarded without recourse to due process. One of such cases in point was the allocation of the OPL 214 and OPL 245 to Malabu Oil on April 29, 1998. The company incidentally was incorporated 5 days earlier, that is, April 24th and it had among its Directors Mohammed Abacha (son of the then Head of State) and Chief Dan Etete, who was then a serving Minister. Back then, no one dared question the authority of the Commander-in-Chief.
It has also been found out that oil blocks have been given out indiscriminately, with people who are not oil producers getting some of the blocks.
Whether one likes it or not, Otunba Mike Adenuga’s Conoil is one of the biggest players in Nigeria’s Oil and Gas sector. His company, Consolidated Oil broke a record on Christmas Day in 1991 as it became the first indigenous company to strike oil in Nigeria. It is an open secret that Otunba Adenuga and the then military President, General Babangida were close pals. Adenuga’s Conoil presently has 6 oil blocks.
Former Chief of Army Staff, Theophilus Y Danjuma is a comfortable man by all standards. Having left the army in 1979, Danjuma tried his hands in various ventures including shipping and trading. In 1995, he founded the South Atlantic Petroleum Limited, an oil exploration firm that was awarded an Oil Prospecting License (OPL) 246 in February, 1998. The block covers 1,000 sq miles or 2,590 sq km.
While drilling on the first well of the block, a condensate field was discovered. In 2005, SAPETRO was granted OML 130 and it produced its first condensate in March 2009. Danjuma was once quoted as saying money was not his problem but how to spend the one he has.
The Mai Deribe family of Borno State has been a popular one for decades. Alhaji Ahmed Mai Deribe, the patriarch earned so much respect as the richest man in the whole of Borno State. Cleaning his palatial mansion is said to cost about N 5 million on a monthly basis and there is no gainsaying that the family makes more money than Borno State annually. The Mai Deribes own Cavendish Petroleum which owns OML 110. OBE 4 and OBE 5 are two prominent oil wells in the block owned by Cavendish and the wells produce an average of 120,000 barrels of crude oil per day. The estimated income of the family from oil has been put at about N 4 billion.
Sanusi Lamido, a Kano Prince and owner of Platform Oil won the Oil Prospecting License for the rich Asuokpu marginal field is another big player in the crude oil business. Of course with all the years Alhaji Rilwanu Lukman spent as Nigeria’s Petroleum Minister and Secretary General of the Oil Petroleum Exporting Countries (OPEC), one would not have expected him to be without a license to do oil prospecting. Lukman who served as Minister for Petroleum from 1986 and 1990 is the Chairman of Afren Energy, one of the big players in the oil and gas sector. He enjoyed very close relationships with those in Nigeria’s power bloc, having worked closely with Generals Buhari and Babangida and after the return of the country to democratic rule, he served as Special Adviser to President Obasanjo as well as his successor, Umar Yar’ Adua, whom he served as Honorary Special Adviser on Energy till he was again appointed as Petroleum Minister. Lukman also served a record of 8 consecutive terms as OPEC President from 1986 to 2002. He manages the oil blocks run by AMNI International Petroleum and Development Company which operates OML 112 and 117.
Alhaji Aminu Dantata, uncle to Africa’s richest man, Aliko Dangote is another man who has his hands in many things Oil and Gas inclusive. His company operates OML 108.
Dr Muhammadu Indimi’s Oriental Energy operates OML 115. The company announced last May that it had encountered 370 ft true vertical thickness of oil pay in its Ebok North Block. Also, Alhaji Atiku Abubakar, Alhaji Ado Bayero are major holders of the shares of Intel, an oil prospecting company that operates in Nigeria and Sao Tome and Principe.
North East Petroleum, owned by Alhaji Saleh Gambo operates OPL 276 and 283 while Chief Emeka Offor’s Starcrest Energy got the Oil Prospecting License 291, though it was later sold. Offor was believed to have effectively used his links with former Head of State, Sani Abacha as well as his affinity with Alhaji Atiku Abubakar to get oil prospecting licenses. Offor’s company also plays big in the oil industry of Sao Tome and Principe. At a point, he was believed to be a major front for his friend, the former Vice President.
OML 108 is operated by Folawiyo Oil owned by the late Baba Adini of Nigeria, Wahab Iyanda Folawiyo.
The richest Black woman in the world Folorunso Alakija too has a big stake in the oil industry. Having left her job in the banking industry, she delved into fashion designing, which she studied in London. Her designs got her into contact with wives of military top shots who ruled Nigeria back then. In 1993, she applied for an oil prospecting license which was eventually granted her company, Famfa Oil. The company operates OPL 216. She transferred 40% of her stake to Star Deep, a subsidiary of Texaco. OML 127, which accounts for about 200,000 barrels per day has also been traced to her company.
A prominent Niger Deltan whose name cannot be wished away from the list of Nigeria’s “oil men” is High Chief O.B Lulu Briggs, the founder of Moni Pulo Oil & Gas Company which operates OML 114.
While some of the owners of the companies prospecting in oil are known, a lot of others are believed to be operating from the background.
Some of those who have commented on the distribution of oil blocs in Nigeria expressed surprise that the names of some of the nation’s leaders, during whose tenures the oil blocks were allocated are conspicuously absent from the list, some others have opined that many have theirs held for them by proxy. Olayinka Kingsly, a businessman in Abuja gave an explanation that “fine, Senator Enang has made his point on the issue, but if you are asking why names like Babangida, Obasanjo and co are not on his list, it may be because they are smart enough to let people hold trust for them”.
Another category of businessmen however exists in the oil sector; it consists of the ones who operate without prospecting licenses and make millions of Naira daily from illegal bunkering of crude oil, mainly obtained by vandalizing pipelines in the creeks of the Niger Delta. The venture has become so lucrative that ships are laden with stolen crude oil for export.