DERIVATION DEBATE: How Northern Leaders ‘Underdeveloped’ the North

Arewa HouseUncompassionate capitalism championed by the greedy northern elite, who own major oil blocks in the Niger Delta, is responsible for the region’s backwardness today

By Ohia Israel

The debate on the justification of giving 13% derivation of Nigeria’s oil revenue to the oil rich Niger Delta states has of recent become subject of national discuss, resulting in a series of sponsored attacks and publications from both proponents of the controversial derivation formula and those  clamouring for its scrapping. However, emerging records exclusively obtained by DESERT HERALD from a northerner and senior staff at the NNPC reveal the contrary. The assertion that the North’s,  glaring disparity of its statutory allocation with the states of the Niger Delta, is the reason why it is poor, undeveloped, largely unemployed, uneducated with alarming rate of crime as a result of the recruits and activities of the Boko Haram sect may not be entirely right.

 The North is indeed facing most of its crisis today not because the resources at the disposal of the state governments comprising the North and the billions being accumulated through government patronage using the oil resources from the Niger Delta as the conduit pipe of such stupendous wealth but because of greed and sheer insensitivity by both the politicians, past military leaders and the business class. The failure to efficiently invest and utilize the vast agricultural land the North is blessed with by the political leadership, notably the governors agitating for review of the federal allocation, our NNPC source lamented, was the reason why unemployment, illiteracy and crime are on the increase in the once promising northern region.

Though oil is known to have its root from the Southern part of the country,  DESERT HERALD gathered that more than eighty percent of the ownership of the country’s oil reserves is in the hands of some influential northerners through acquisition of marginal oil fields, Oil Mining Licenses (OML) and Oil Prospecting License (OPL).

Most of these allocations (oil deals) were acquired under different military regimes spearheaded by Northerners – Generals Ibrahim Babangida,  Sani Abacha of blessed memory and also Nigeria’s ‘last’ military leader, Abdusalami Abubakar.

But despite the amazing wealth held by some of these influential northerners as a result of the acquisition of these oil blocks, this paper can reveal that most of the individuals to whom most of the nation’s juicy oil reserves have been conceded are in all ramifications individually richer than some African oil-producing nations such as Ghana, Niger Republic, Chad and Sudan; and in fact going by their earnings, they may even be richer than most of the Niger Delta states enjoying the 13% oil revenue derivation.  Yet they offer virtually nothing in return to the north or even their states of origin.

“For me, the IBBs, Abdulsalamis, T.Y Danjumas, Atikus, Jerry Husseinis, Dantatas, Dangotes, Babangida Aliyus etc are only deceiving northerners by forming so called groups to save the north. They have more than enough resources to salvage the north. They are individually richer than the so called Niger Delta states. What did the state governors do with the billions they collected from the federal government over the years and the billions they generated over the years? They are all insensitive and greedy. Even if you give such northern leaders and governors the resources of this world the north will still remain poor and impoverished. That is uncompassionate capitalism for you”, lamented our NNPC source, who pleaded not to be named for fear of victimization.

He said the Niger Delta leaders are judiciously utilizing the opportunity they got while the north, after spending many years in power, is lamenting their deliberate failure and putting the blame on Mr. Jonathan.  One of the local oil industries known as Cavendish Petroleum,  operators of OML 11O, which is also known to have good yielding, OBE field was indeed awarded to Alhaji Mai Deribe – the late Borno patriarch, by the then Late General Sani Abacha on the 8th of July, 1996. Deribe even after death remains arguably the richest man in the history of Borno State and among the top ten in the entire north east.

Deribe’s OML 110 today has enormous oil reserves which are in excess of 500 million barrels that are indeed more than the entire 300 million barrels reserves of Sudan with a capacity to produce about 120,000 barrels of crude oil daily from its OBE 4 and OBE 5 wells.

DESERT HERALD findings also reveal that at the current level, the Mai Deribes make an average N4billion every month through crude oil sales with the estimates of price of crude being sold at $100 per barrel.

Another individual in that same category, this paper gathered, is Prince Nasiru Ado Bayero, first cousin to the CBN Governor, Mallam (Prince) Sanusi Lamido. He is said to be a major shareholder and Director in an Oil company known as   Seplat/Platform Petroleum. Seplat Group, this paper learnt, are the operators of the Asuokpu/Umutu Marginal Field with a capacity of generating 300,000 barrels monthly and 30mmfcsd gas plant capable of feeding 100MT of LPG.

However, the among all the oil blocks, DESERT HERALD findings show that the South Atlantic Petroleum Limited (SAPETRO) is also in the lead of oil blocks being owned by northerners. This oil industry is a Nigerian Oil Exploration and Production Company owned by multi billionaire retired soldier, General T.Y Danjuma (rtd). It was created in 1995 by the Taraba born retired army general. Danjuma also is the Chairman of ENI Nigeria Limited. Danjuma’s SAPETRO it will be recalled got its Oil Prospecting License 246 from General Sani Abacha in February 1998.

SAPETRO, which is the oldest of all the northern-backed oil and gas companies with oil block in the Niger Delta, is said to cover a total area of 2,590km2 (1,000 Sq. Miles) and SAPETRO is known to have partnered with Total Upstream Nigeria Limited (TUPNI) and also Brasoil Oil Services Company Nigeria Limited (Petrobras) to start prospecting on OPL 246.

The SAPETRO made a lot of discoveries in terms of oil fields which include AKPO, a condensate field discovered in April 2000. However this paper gathered that the firm made its first drilling exploration well of (Akpo 1) on the block and it was also discovered on the OPL 246 which include the Egina Main and Egina South, Preowei and Kuro; however Kuro was suspended as a dry gas/ minor oil discovery.

In June 2006, Gen. Danjuma’s SAPETRO also divested part of its contractor rights and obligations to China National Offshore Oil Corporation (CNOOC) for amount said to be in the tune of $1 billion.

A well articulated piece written by Ross Alabo-George, a copy of which was made available to this paper, revealed that Akpo exports about 230,000 barrels of condensate daily, and it is obvious that condensate export is not regulated by OPEC, so it means that SAPETRO/TOTAL exports as much as possible daily, while its Egina exports about 75,000 barrels of crude oil daily.

The findings also show that Akpo and Egina therefore export over 300,000  barrels of oil and condensate daily which is three times what Ghana as a country currently exports and perhaps if converted to cash ten times more than what the entire states of the Niger Delta collect monthly, the 13% derivation inclusive. And out of this volume of oil that is being sold by SAPETRO, it gets about 25 per cent which also excludes the gas components that is amounting up to 2.5 trillion cubic feet. The amount is even more staggering and alarming if compared with what the ‘poor’ northern states, including T.Y Danjuma’s Taraba State, are getting from Nigeria’s oil revenue.

Furthermore, a company known as AMNI International Petroleum and Development Company, which is owned by (Colonel) Sani Bello an indigene of Kontagora of Niger State in northern Nigeria operates the OML 112 and OML 117, and it is on record that on the production-sharing contract, AMNI gets 60 per cent for owning the oil block, while Total gets 40 per cent for providing technical advice. Moreover, the OML 112 was awarded on 12 February, 1998 and the OML 117 awarded on 4 August, 1999, all by former Head of State, General Abdulsalami Abubakar whose eldest daughter is married to Bello’s son, Abu.

However operations were said not to kick start on both blocks until 26 February, 2006 and it was expected that both licenses were to expire on 11 February, 2018 and 5 August, 2019 respectively.

This paper learnt that AMNI produces twice as much as Cavendish Petroleum. On the other hand a former Petroleum Minister, Rilwanu Lukman, who is of Fulani origin and also multi-millionaire controlling holdings in Afren, is also said to manage AMNI oil blocks and with key interest in the NNPC/Vitol trading deal. Vitol a London- based oil trading company lifts 350,000 barrels of crude oil daily from Nigeria and is also owned by the former minister. Also in the kitty of the former minister is the Okoro and Setu field in OML 112 which has about 50 million barrels in reserve, operated by Afren Energy, currently rake in below 20,000 barrels per day in exports.

Similarly, another key oil firm is the Oriental Energy Resources, which is owned by Alhaji Mohammed Indimi, who also happens to be a close friend of General Ibrahim Babangida. IBB’s first son, Mohammed, is married to Yakolo, Indimi’s daughter. Indimi’s daughter is a director in Oriental Energy Resources. Today Oriental Energy Resources is known to run three oil blocks which include OML 115, Okwok field and also the Ebok Field.

Meanwhile OML 115 and Okwo are OML PSC while Ebok is also an OML JV which shows that all of them are crown offshore oil blocks. This paper can also reveal that OML 115 has about 228sq Km of which Oriental Energy Resources controls about 60 percent while Equity Energy Resources AS of Aliko Dangote’s oil and gas investment controls 40 percent. While in Okwo oil field Addax has about 40 % and also on the Ebok Oil field Oriental owns full 100%.

As the north continues to face serious challenges of underdevelopment, crime and unprecedented corruption due to failure of state governments to judiciously use statutory allocations and the inability of the likes of Lukman, IBB, Indimi, Dantata etc to use part of the resources they undeservedly accumulated as a result of such oil blocks allocation, Alhaji Aminu Dantata is also among the list of many northerners that are enjoying proceeds of oil wells from the Niger Delta. Dantata floated Express Petroleum and Gas Limited for the intention of attracting oil block(s), which he also got on November 1, 1995. Late General Abacha gave his company endorsement to operate the OML 108.

However, findings reveal that CAMAC Houston, a company owned by Kase Lawal, bought 2.5% of Express Petroleum’s 60% holdings, while the other 40% on OML 108 is owned by Sheba E&P Limited. Moreover the OML 108 operator Shebah Exploration and Production Limited (SEPCOL) has an office in Lagos with headquarters in Minna. SEPCOL operates the Ukpokiti offshore field in Shallow water Nigeria, which was acquired from ConocoPhillips in May 2004.

Further investigations reveal that Alhaji Saleh Mohammed Jambo owns NorthEast Petroleum Limited, and the same organization is the holder of OPL215 license which is said to cover an area of about 2,564 square kilometres in water depths between 200 to 1600 metres. Northeast is parent company of Rayflosh Petroleum, which was also given the award of two oil blocks which are OPLs 276 & 283 and which also, closed a Joint Venture Agreement with Centrica Resources Nigeria Limited and CCC Oil and Gas. It was gathered that the license was awarded to him by General Ibrahim Badamasi Babangida in 1991 and renewed in 2004 by former President Olusegun Obasanjo.  So far $50Million has been spent on the very promising Okpoi-1 and Egere -1 exploratory well.

Oil giants, Intels are also owned by the three families of late President Yar’Adua, Alhaji Ado Bayero and former Vice president Atiku Abubakar.  The oil and gas free Zone and oil services centers which also support Bases which are being operated from government-owned facilities are leased to Intels under long-term agreements. Moreover, Intels is also known to run ‘private port’, as a counter venture to the Calabar, Warri and Port Harcourt ports. At the Port Harcourt’s facility of the company for instance, there are over one hundred major companies.

These multi billion naira oil businesses which amount to nearly 80% of the oil blocks in the Niger Delta region according Alabo-George is owned by prominent northerners with many oil deals and bunkering activities through proxies that were not mentioned. The north and its people notwithstanding their grip on power since Nigeria’s Independence until recently are not only the poorest but most underdeveloped region in terms of both infrastructure and education. Insecurity is further killing what is left of this once prosperous economy. According to statistics by experts what late Mai Deribe alone is getting from his oil well is enough to fully develop the entire north east while the proceeds of the likes of Indimis, Dantatas, Dangotes, IBB, Atiku etc is more than enough to fully transform both the structure and economy of not only the north central and the north west but the southern part of the country as well.

Considering the fact that federal statutory allocation for the north has not only been mismanaged but out rightly looted by past and present state governors and their cohorts which makes many like Saminu Turaki, Adamu Aleiro, Senator Ali Modu Sheriff, Adamu Mu’azu, Ibrahim Shekarau, George Akume, Bukar Abba Ibahim and many others overnight billionaires to the detriment of the yearnings and aspirations of those impoverished northerners that elected them and the continued plundering of same resources by current occupants of the Government Houses, it is indeed unacceptable for the north to remain so dilapidated, poor and backward. According pundits, for the state governors to clamour for the review of the 13% derivation to the Niger Delta states or the current move by some leaders of the north some of whom owned such oil reserves without investing anything in the north resulting in youth restiveness and the Boko Haram imbroglio to now engage in jamboree convention and summits that will hardly address the core issues, is a big joke.

We gathered if the so-called northern leaders  are really sincere,  they have more than enough resources from the same oil revenue  of the Niger Delta to reposition the north, its infrastructure and economy.

So far, what those northern elites and ‘business men’ are benefitting from Nigeria’s oil has not reflected on the living conditions of the poor and impoverished northerners. The vision and legacies of the likes of Sir Ahmadu Bello have been destroyed largely by those that benefitted from the goodwill, generosity and patriotism of the founding fathers. Indeed uncompassionate capitalism that may end up benefitting the west or some smart bankers has killed the hopes, aspiration, infrastructure and economy of north.

With additional reports by Maryam Musa and Ross Alabo-George

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Categories: Lead Story


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One Comment on “DERIVATION DEBATE: How Northern Leaders ‘Underdeveloped’ the North”

  1. Yuba
    March 24, 2012 at 2:46 am #

    Very interesting write up. That means the North actually controls the Nations Oil.

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