Does that mean Nigeria has cleaned up its act?
Not according to NGO Global Witness who issued a report in April accusing Royal Dutch Shell of “knowing” that more than a billion dollars spent on a marine oil lease was really a bribe for ministers connected to former president Goodluck Jonathan, who lost power in the 2015 election.
From its headquarters at The Hague, Shell denied wrongdoing and said it would counter the allegations. But the Global Witness report, seen by The Zimbabwean, has pages of data that seem to back its case.
Shell is a household name in southern Africa, but they’ve been in Lagos since the 1930s and were the first to strike oil shortly before Nigeria’s independence in 1960.
And it hasn’t all been bad. One of their recent sales – not linked to claims of corruption – may have lessons for Harare.
In 2014, with rising problems over safety in the Niger Delta, Shell decided to sell its oil-mining lease on what some say are the richest on-land wells in Africa, along with a 100km-long pipeline carrying crude to the coast.
The buyer, Benedict Peters, was Nigerian and so was his company, Aiteo. There have been no claims of anything untoward in the deal. But where ministers and generals who took over Zimbabwe’s farms were largely a disaster, Aiteo has managed to more than triple the flow of oil from OML or “Oil Mining Lease” number 29.
Two years ago, when the sale went through, Shell obtained 23 000 barrels a day from the site. Aiteo has lifted output nearly 400% to 90 000.
Nigeria’s government has talked of indigenisation since the 1970s, but with coups and a barrel price that rose and fell with conflicts in the Middle East, it never quite happened.
Oil makes up 94% of the country’s export revenue, so a lot was at stake.
In Lagos and Abuja, the press has not been kind to Goodluck Jonathan since he lost office, and barely a week goes by without Nigeria’s woes being blamed on the old regime. His successor, Muhammadu Buhari, campaigned on a promise to end corruption, but critics say he has simply gone after political rivals, including Jonathan.
However, the Global Witness report makes no reference to Aiteo, Peters or Shell’s sale of the OML 29.
What is not in doubt is that, during his time as president, Jonathan became serious about the local ownership of oil, taking what some would see as a risk. Latest figures show he may have been right.
In recent years, Nigerians have spent more than $10‑billion buying back their oilfields, with 70% of this funded by local banks.
And according to Peters, new sites are being developed that could give his company a flow of 150 000 barrels along with 5.6‑million cubic metres of gas a day.
Originally a town planner, Peters started buying and selling goods while still at school. He is fluent in French, English and the languages of Nigeria, and has spent most of his life in business.
The purchase of OML 29 required him to borrow heavily, risking his other assets.
Despite his recent success and unlike many wealthy Nigerians, he has not run for political office.
Peters has long condemned the country’s reliance on oil and its lack of local industry, calling for “a diversified and resilient economy” so that, when OPEC drops the price, it doesn’t lead to “a rise in unemployment and a rise in hunger”.
But there are other problems:
- The Niger Delta, where much of the oil comes from, is rife with with lawlessness and unemployment.
- Half the population lives below the United Nations poverty line.
- Muslim cattle herders from the north have moved into the region to graze their livestock, leading to a low-scale civil war with the largely Christian locals.
- Equipment, ranging from buckets to bulldozers, must be guarded day and night, and thieves bore into the pipelines, tap the flow into drums or even tankers and sell it.
- For its size, Nigeria produces little electricity, and mines haveto rely on generators.
After years of difficulty, international oil companies, including Shell, have either scaled down or moved their rigs out to sea, selling some of the delta wells. With the blessing of the government and the banks, local buyers snapped them up.
But Peters believes prosperity is the only path to peace. “By working together, we inspire people and communities,” he told journalists recently.
“We have shown by our story that indigenous oil companies are competent.” This, he says, opens the way to “a transformed energy sector that creates wellness and economic prosperity”.
Zimbabwe, once among the best economies in Africa, went on a grab-all of assets, with dire result.
Likewise, if Nigeria had seized foreign wells, it could have seen wholesale disinvestment and a collapse of the naira.
Instead, a system was nurtured that allowed locals to raise finance against future revenues, buying not just oil claims but, in Aiteo’s case, the key pipeline that carries crude from mine to port.
As Shell and Global Witness trade blows and Buhari continues his war on corruption, Nigerian oil output is growing, raising gross domestic product and keeping profits largely in the country.
There may be a lesson here for Africa.
And Zimbabweans might wish Mr Peters would bring his ideas to Harare.Post published in: Featured