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IN his speech at the recent Extractive Industries Transparency Initiative Beneficial Ownership Conference in Jakarta, Indonesia, Vice-President Yemi Osinbajo revisited one of Nigeria’s most troubling and complicated oil scams, the Malabu Oil and Gas deal, involving Oil Prospecting Licence (OPL) 245. Since 1999 when the lid was blown off the shady award of OPL 245 to a family member of the late military Head of State, Gen. Sani Abacha, all efforts to bring a closure to the questionable transaction have revealed even more revolving doors of corruption. The deal resulted in both criminal and civil proceedings in different countries across the world, with huge legal costs to the Federal Government. Meanwhile, the benefits of the controversial but very lucrative oil block have continued to elude Nigeria and its citizens.It is, therefore, no surprise that the unresolved Malabu oil scam engaged the attention of the vice-president in far away Jakarta. According to Osinbajo, Nigeria is still grappling with the negative consequences of the secret ownership of companies by top members of government who awarded themselves and their cronies juicy contracts in the extractive industry. He cited the Malabu Oil and Gas case as a reminder of how hidden ownership of corporate organisations poses grave danger to the country.He said that the Malabu scam shows that anonymous corporate ownership could serve as vehicles for masking conflicts of interest, corruption, tax evasion, money laundering and even terrorism financing. Going forward, the vice-president said it has become a “matter of life and death” for African countries to break the wall of secret corporate ownership.Anyone who has followed the web of conflicting interests in the shady award of OPL 245, which is believed to be one of the most valuable oil fields in West Africa with an estimated nine billion barrels of crude oil, and how at various times since 1998, the proceeds from the oil block were reportedly shared among top Nigerian government officials as bribes, will appreciate Osinbajo’s lamentation. It mirrors corruption in high places and deep conflict of interests among top government officials using their privileges to feather their nests at the detriment of the country. The case urgently calls for the establishment of a public register of the beneficial owners of all oil companies operating in the country.It is not too hard to see how the Malabu Oil scam became a kind of horror movie that continues to haunt the Nigerian oil industry, almost 20 years on. It is about corruption that dominates many oil contracts in Nigeria, overshadowing every other good thing in that sector. Abacha awarded the oil block to a company which has one of his family members as a majority shareholder.Regrettable, also, is the fact that the successive civilian administrations of Gen. Olusegun Obasanjo and Dr. Goodluck Jonathan, mishandled the revocation of the award and its aftermath. This is the burden that the present administration has inherited, as acknowledged by the vice-president, in criminal and civil suits with huge legal costs. Although OPL 245 was revoked by the Obasanjo government in 2001, it failed to re-award it to another entity, but handed it over to the oil giant that was the original “technical partner” in the controversial Abacha deal. This culminated in a series of legal actions that are still ongoing.However, the out-of-court settlement that was reached between the contending parties and the Federal Government in exchange for $1.3 billion, being the premium price of the oil block to be paid by the two oil firms involved in the matter, did not resolve the issue. Some top officials of government were also alleged to have helped themselves to the signature bonus estimated at about $210 million reportedly meant for the Federal Government.Similar cases of underhand business practices are rife in the oil sector and other sectors without the government beaming its searchlight on them. The worry is that unwholesome practices such as the Malabu Oil scam that turned into a controversial deal erode confidence and profitability in business operations in Nigeria. Even the good work of the government agency, the Nigeria Extractive Industries Transparency Initiative(NEITI), has done little to hold companies and public officials accountable for their actions.Government’s fight against corruption will win new converts if it convinces skeptics that it follows through both present and past cases of corruption. Nigeria must also swiftly move against secret ownership of companies and the public officers involved in such actions. Source: The Sun Newspaper
