Revealed: Northern moneybags who are richer than their states . . . and how they made their money

Posted by News Express | 23 May 2014 | 6,438 times

Gmail icon


The murky oil dealings of Nigeria’s military and political elite have led to a handful of oil barons from northern Nigeria controlling billions of naira worth of oil assets, while states in the region battle with revenue shortfalls and a raging insurgency, according to a report in the Lagos-based BusinessDAY.

Citing one example, the report says: “Borno State-born Ahmed Mai Deribe’s Cavendish Petroleum is the operator of OML 110 with the capacity to produce about 120,000 barrels of crude oil daily from its OBE 4 and OBE 5 wells.

“Cavendish nets about N4 billion monthly in crude oil sales or N48 billion per annum – at optimal production levels – using current oil price of $100 per barrel.

Borno State, the hotbed of the Boko Haram insurgency, on the other hand, had a 2014 budget of N204 billion, equivalent to N41,632 ($260) per person.”

Continuing, the report says: “Northern Nigeria’s poverty rate is above 70 percent, double that in the south, and the gap continues to widen. Income per head is 50 percent lower than in the south, while the lack of economic opportunities and youth unemployment of over 60 percent in most states of the north-east are driving some into the arms of radical Islamists.

“The states in the region, which are mostly unviable without the transfer of oil money from the centre, have also been hit by the criminality and oil theft in the Niger Delta region, which reduced overall government revenue by as much as $12 billion in 2013.

“As the insurgency in the north-east rages, it is leading to a vicious circle of poverty and underdevelopment.

“The northern oil barons have largely moved south, to the relatively peaceful commercial capital of Lagos where their oil companies are mostly headquartered. As they flee the violence, it is in turn exacerbating the lack of opportunities up north.”

BusinessDAY quotes one analyst as saying: “The fact that the rich oligarchs from the north do not reside there and have their businesses in the south means a lack of tax revenues for the northern states.”

The problem, according to the paper, is now being complicated by the insidious targeting of education by the insurgents, an example of which is the Chibok kidnappings.

“The north-south divide in Nigeria’s secondary school attendance rate highlights a glaring regional inequality in education attainment. Northern Nigeria’s poor education indicators are a deterrent to investors seeking skilled labour,” said Yvonne Mhango, a Renaissance Capital analyst, in a May 2013 report.

“Nigeria’s southern states evidently have higher secondary school attendance rates than the northern states. Again, the north-eastern states (Bauchi, Taraba, Yobe and Borno) fare poorly, with school attendance rates of less than 10 percent,” Mhango said.

According to BusinessDAY, “As oil transactions go in Nigeria, indigenous firm South Atlantic Petroleum’s (SAPETRO) 2006 deal with China National Offshore Oil Corporation (CNOOC) was a particularly lucrative one. In the deal, T. Y. Danjuma’s SAPETRO, with headquarters in Lagos, divested 45 percent of its contractor rights and obligations in Oil Prospecting Licence (OPL) 246 to CNOOC for $1.75 billion (N283.5 billion), while retaining a 5-percent stake.

Danjuma, a retired general, who was awarded the oil bloc in February 1998 by military dictator, Sani Abacha, is a veteran of the Nigerian Civil War from what is now Taraba State in northern Nigeria.

“Taraba, with a population of 2.7 million (2012), had a net secondary school attendance ratio of only 6 percent (2007), according to data from the National Bureau of Statistics (NBS), and investment and research firm Renaissance Capital.

“SAPETRO’s take from the CNOOC deal is 240 percent higher than Taraba State’s 2014 budget of N83.33 billion, which adds up to only N30,740 ( $192 ) per person on a budget-per-capita basis.

“While SAPETRO has not broken any Nigerian laws in its dealings with CNOOC, some analysts question the extreme disparity in wealth between the oil barons of northern Nigeria and citizens of their respective states.”

BusinessDAY quotes an oil industry analyst who spoke on condition of anonymity as saying: “It is an anomaly, frankly speaking. The oil barons of Texas in the United States are products of a booming state economy that has one of the lowest unemployment rates in America. In Nigeria, it’s the exact opposite.”

As the paper further reports, “Other billionaire oil barons with struggling states include Sani Bello, chairman, AMNI International Petroleum Development Company, who is from Niger State. AMNI International Petroleum Development Company owns two oil blocs, OML 112 and OML 117, both awarded by Abdulsalami Abubakar who presided over elections that ushered in Nigeria’s current civilian rule.

“The Okoro and Setu fields in OML 112 are estimated to have about 50 million barrels in reserve and currently produce/export just a little below 20,000 barrels per day. AMNI’s assets can be valued as high as N256 billion ($1.6 billion), according to CBO Capital.

“Niger State, on the other hand, had a budget of N98.8 billion in 2014, equivalent to N21,478 ($134) per person in the state.

“Express Petroleum and Gas Limited, floated by Aminu Dantata from Kano State, is the owner of OML 108 awarded by Abacha in 1995, and OPL 227. The firm’s holding, which contains up to 2.7 million barrels per day of oil, may be valued as high as N3.52 billion ($22 million), according to CBO Capital.

“On the other hand, Kano State’s 2014 budget of N219.2 billion is equivalent to N19,927 ($124) per person.”

•Photo shows retired Gen. T Y Danjuma, one of the northern moneybags believed to be richer than their states.


Source: News Express

Readers Comments

0 comment(s)

No comments yet. Be the first to post comment.


You may also like...