President Muhammadu Buhari recently launched a double-edged battle that, if effectively fought and won, will bring substantial succour and monumental benefits to the Nigerian people in a very big way. The two well-thought-out battles are the recently-inaugurated clean-up of the massively polluted Ogoni land, in Rivers State, and the court case instituted against one of the big crude oil players on the crude continent of Africa – Shell Petroleum.

Incidentally, both the environmental battle to clean up Ogoni land and this new litigation have one major culprit in mind: Shell Petroleum. The first battle concerning the clean-up exercise in Ogoni land is somehow a win-win battle, since Shell Petroleum is also a contributor in a bid to clean up the bad corporate image it has garnered for itself over the years. But the litigation over alleged theft of Nigeria’s crude instituted against Shell by President Buhari would have considerable impact on the global brand of this Western-owned crude oil player.

To underscore the enormity of the battle and the uphill task ahead of President Buhari, I will refer readers to the book by Mr Duncan Clarke, aptly titled: Crude Continent: The Struggle for Africa’s Oil Prize. In this bulky book, the author listed Shell Petroleum as a super-major under whose wing one of the few super independent multi-national crude oil firms operating on the African continent partner with.

His words: “The Super-independent is demarcated primarily by market capitalisation. This is a crude criterion. Many super-independents perform like smaller players, while some ape the larger beasts. They have elastic upstream capabilities, but are sandwiched between larger and smaller players. There is a twilight zone. A few hold the view that they match anything the super-majors may offer.”

The author wrote further on the gigantic status of Shell Petroleum, thus: “ENI (Africa’s ‘Italian Stallion’) stands out as the leader of this group in Africa. In West Africa, ENI has a strong position in Nigeria where it is a partner in NLNG (10.4 per cent), a key player in Brass LNG and a partner in the GIANT Shell operated Bonga Field (12.590).”

Mr Duncan, author of this genuinely phenomenal text on the intrigues behind the opaque businesses of crude oil exploration and exportation in Africa, has over 40 years’ background in the economics of Africa and the Developing World, and 30 years inside the world exploration industry.

For a leading writer, thinker and speaker on geo-politics in Africa and strategy in the world oil industry to classify the crude oil venture of Shell Petroleum in Nigeria as a 'giant' is a clear demonstration that this latest round of legal warfare launched by the Federal Government requires the sustained support of all and sundry, so that the justice of this case is done and seen to have been actualised to the glory of Nigeria. In this landmark litigation, the Nigerian government is demanding $406.75 million minimum from Shell Petroleum Development Company of Nigeria Limited and its surrogate Shell Western Supply & Trading Limited, over alleged crude oil theft. The amount, according to court papers in Lagos, represents the shortfall of the money paid by the multi-national oil firm in the account of the Federal Government with Central Bank of Nigeria (CBN), for crude oil lifted in 2013 and 2014. Local newspaper reports quoted government lawyer, Prof Fabian Ajogwu, as accusing the Anglo-Dutch company of not declaring or under-declaring crude oil shipments during the period.

The Nigerian government affirmed that it reached this determination after extensive forensic analysis of bills of lading and shipping documents. So, Ajogwu, armed with sworn affidavits of three United States of America-based professionals, claimed that Shell cheated Nigeria of the revenue. Among the three professionals employed by the Federal Government of Nigeria are: Prof David Olowokere, a US citizen who is the lead Analyst at Loumos Group LLC, a technology and oil and gas auditing firm based in United States of America and, Jerome Stanley, a counsel in a United States’ law firm, Henchy &Hackenberg, and head of the legal team engaged by Loumo Group LLC. The third professional is Michael Kanko, a citizen of the USA and resident of the State of Arizona, who is the founder and current Chief Executive Officer of Trade Data Services Company.

We are told that the consortium of experts was able to track the global movements of the country’s hydro-carbons, including crude oil and gas with the main purposes of identifying the companies engaged in the practices that led to missing revenues from crude oil and gas exports sales to different parts of the world. In reconciling the export records from Nigeria, with the import records at ports in the United States of America, the experts found mind-boggling discrepancies. Nigeria affirmed, for instance, that on January 6, 2013, defendants lifted crude oil using the vessel AUTHENTIC and shipped same to BP Oil Supply of 28301 Ferry Road, Warrenville, Illinois, USA, at the port of Chester, Pennsylvania, United States of America. The shipment had the Bill of Lading number: ALMYSVDM161212A3. This particular shipment was not declared to the relevant authorities in Nigeria, resulting in the shortfall of 660,712 barrels of crude oil valued at $72,678,320 as revenue to the Federal Government.

On January 3, 2013, Shell and its surrogate company lifted crude oil that resulted in the shortfall of 979,031 barrels in the value of $107,693,410. On December 14, 2014, Shell also lifted crude oil using the vessel EAGLE TUSCON and shipped same to Shell Deer Park of 5900 Texas 225, Deer Park, TX77536, USA at the port of Houston, Texas, United States of America with Bill of Lading number AETK0909US14. The shipment was not declared to the relevant authorities, resulting in the shortfall of 499,048 barrels of crude oil in the value of $54,895,280 as revenue to the Federal Government.

Shell, with its allied company, was also alleged at three different times to have shipped crude on board EAGLE TUSCON, EAGLE SEVILLE, OVERSEAS’ EVERGLADES that resulted in the shortfall of 3,697,737 barrels of crude oil.

This brings the total value of the entire shortfall to $406,751,070 On January 21, 2016, the Federal Government, through its legal representative, wrote a letter to the defendants, drawing their attention to the discrepancies.

Government had in that correspondence asked the alleged thief of our commonwealth to clarify the discrepancies, with documentation, as a prelude to the repayment of the revenues and debt they now owe the government.

In its usual arrogance, Shell, till date, has not responded. As a result, government told the court that it has neither received from the defendants any payment pursuant to the said letter nor the requested documents. The Nigerian government averred that it has suffered huge and enormous financial loss as a result of the defendant’s under-declaration of the value of the crude oil they lifted and exported to the United States of America.

From Quartz Africa Weekly Brief, a writer also questioned the rationale behind the running of the extractive industry in the crude oil sector of the Nigerian economy without checks and balances. The roles played by key officials of the Nigeria national Petroleum Corporation (NNPC) were also subjected to intense intellectual scrutiny, with a damaging conclusion that only insiders in the state-run crude oil entity could have conspired with the foreign crude oil firm, such as Shell, to shortchange Nigeria of this huge resource.

The writer of the piece aptly titled “Nigeria doesn’t know exactly how much oil it produces, but is pretty sure $17 billion is missing” has, therefore, recommended that Nigeria must work out effective metering system in all of its crude oil wells, to determine the volume of daily production. He noted:

“How could a foreign company make off with hundreds of millions of dollars’ worth of petroleum without declaring it? The answer, analysts say, lies in the unique deficiencies of Nigeria’s oil infrastructure.”

Dolapo Oni, Head of Energy Research at Ecobank once observed: “Nigeria doesn’t measure its oil production based on how much individual oil wells produce, but rather on how much oil leaves through its export terminals. That approach is vulnerable to undercounting. Faulty or non-existent metres on pipelines and wellheads occasionally lead to disputes between well and pipeline operators, over how much oil an individual well is sending through a pipeline. And thieves have also been known to tap into pipelines and siphon off oil, either to refine or just to sell. If pipelines and wellheads had metres, regulators would be better able to track where Nigeria’s oil is going, and figure out exactly how much oil the country produces. That’s part of where the corruption in industry is, because once the metering is done, there’ll be no more gaps or loopholes. If we had efficient metering, there’s no way either party would be lying.”

“Nigeria Officer at the Natural Resource Governance Institute, Dauda Garuba, said oil companies have rejected calls to put meters on oil infrastructure, saying it would be too expensive.”

But Nigeria’s government hasn’t pulled its weight either, Garuba said.

The Petroleum Industry Bill (PIB) would reform Nigeria’s oil sector, but it has languished in the National Assembly for years. One of those reforms could be to mandate metering on all segments of the oil supply chain, Garuba said of the lawmakers, adding:

“For me, I think they’ve been sleeping on their rights and their responsibility forever. It’s also getting worrisome that each time you hear of scandals like this, nothing gets to come of it.”

The Nigerian Government now seeks a court order compelling the two companies to pay into the Federal Government of Nigeria’s account with the Central Bank of Nigeria, the sum of USD 406,751,070 being the total value of the missing revenue from the shortfall/undeclared/under -declared crude oil shipments of the country, made by the companies to United States of America. The Federal Government also demands interest payment at 21per cent per annum on the sum of $406,751,070 until the entire sum is liquidated.

Shell, in addition, is being asked to pay general exemplary damages in the sum of $406,751,070 and the cost of instituting the legal action. The presiding judge, Mojisola Olatoregun Isola, has adjourned till 20th of October 2016 for mention of the case.

Nigeria has also sued Chevron, Total and Agip asking for a total of $12.7 billion over alleged non-declaration of some 57 million barrels of crude shipped to the United States between 2011 and 2014. The oil firms are among up to 15 oil majors targeted by the Nigerian government for the recovery of $17 billion in deprived revenue. Already, this case is receiving favorable support from all over the world. One aspect of these several interventions that have poured out in the global media since the last 24 hours that the latest case became public knowledge locally goes to show that corruption and lack of transparency has remained entrenched in the running of the crude oil sector here.

The Nigerian extractive industry agency headed by Mr Waziri Adio, a journalist, is known to have issued several reports urging the National Assembly and the executive branch of government to bridge the gaps so as to stop the leakages, such as the issues that have compelled the commencement of this litigation by government in the first place. Government must necessarily reform the Nigerian National Petroleum Corporation to weed out corrupt middlemen aiding and abetting large-scale theft of Nigeria’s crude oil money.

Author Duncan Clarke had summed up the ubiquitous corruption in NNPC as follows: “As oil developed, so corruption expanded in favour of middlemen, commission agents and those close to central power, especially within the State Company, the Nigeria National Petroleum Corporation.”

Whilst commending President Buhari for taking the giant leap of faith to try to use legal means to take back huge funds stolen from us by Shell Petroleum Company, it must also beam the searchlight on all those the government has saddled with the responsibility of running the NNPC.

Duncan Clarke calls NNPC the house of cards, because of the wanton corrupt practices being perpetrated by the officials, I have chosen to use the French term ‘C’est une enorme arnaque’ (this is a huge scam), to describe the modalities government officials use to run the crude oil sector of the economy. These crude criminals must be dealt with in line with the rule of law, for Nigerians to begin to enjoy the benefit of the enormous resources bestowed on Nigeria.

•RIGHTSVIEW appears on Wednesdays, in addition to special appearances. The Columnist, a popular activist, is a former Federal Commissioner of Nigeria’s National Human Rights Commission and presently National Coordinator of Human Rights Writers’ Association of Nigeria (HURIWA). He can be reached via 08033327672 (sms only) or via doziebiko@yahoo.com

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