Falana Raises Alarm Over ‘Diverted’ $105b Oil Revenue From Fed. Account
Senior Advocate of Nigeria, SAN, Mr. Femi Falana, has raised alarm over a purported $103.7 billion generated from oil sale that have been embezzled or diverted from the nation’s coffers.
Mr. Falana raised the alarm in a letter addressed to the President of the Senate, Dr. Ahmed Lawan, titled “Request to ensure the recovery of $105 billion by the Federal Government“.
In the letter, the legal icon asked Senator Lawan to ensure the said sum is retrieved, being proceeds of oil sales, by collaborating with anti-corruption agencies, and the funds returned to the federation’s account.
See copy of the letter dated October 18, 2019, below:
Dr. Ahmed Lawan
The Senate President
National Assembly Complex
Third Arms Zone
Request to ensure the recovery of $105 billion by the Federal Government
In November 2015, we drew the attention of the Federal Government to the loss of billions of dollars arising from the non implementation of the Deep Offshore and Inland Basin Production Contracts Act. Based on the provisions of the law the Federal Government and the International Oil Companies entered into Production Sharing Contracts which provided for an upward review of the loyalties whenever crude oil was sold beyond $20 per barrel in the international market. Even though the price of crude was beyond $100 per barrel in the recent past both parties ignored the provisions of the law to the detriment of the national economy.
We were equally compelled to call on the national assembly to amend the Deep Offshore and Inland Basin Production Contracts Act in favour of the Nigerian people. Although the call was ignored but we kept up the pressure on the executive and legislative branches of the federal government to do the needful.
However, we are delighted to know that the national assembly has belatedly resolved to amend the Deep Offshore and Inland Basin Production Contracts Act. In fact, the Senate has passed the Amendment Bill. Upon the passage of the said bill last week you had this to say:
“The Bill must be passed and concurred to by the House of Representatives and of course, assented to by President Muhammadu Buhari who is on the same page with us.
As a patriotic Senate, there is no way, we would have yielded to pressures and deny our dear country $1.5 billion that will be accruing into her account on yearly basis based on contractual sharing agreements put in place by the new provisions which become law when finally assented to by the President.”
Mr. Senate President, we fully agree with you that the Deep Offshore and Inland Basin Production Sharing Contracts (Amendment) Bill ought to be speedily passed by the House of Representatives and assented to by the President since the law will fetch the country the sum of $1.5 billion per annum. While we commend the Senate for the initiative in passing the Bill we urge the national assembly to ensure the recovery of the funds listed below:
1. In his reaction to our allegation of economic sabotage by the public officers who deliberately refused to implement the Deep Offshore and Inland Basin Production Sharing Contracts Act the immediate past Minister of State in the Ministry of Petroleum Resources, Dr. Ibe Kachukwu admitted that the non implementation of the law by some unnamed public officers had led to a loss of oil revenue of over $60 billion. But due to the reluctance of the federal government to enforce the law the governments of Akwa Ibom, Bayelsa and Rivers States instituted an action at the Supreme Court in 2016 to compel the Federal government to recover the accrued royalties.
In the judgment delivered in the case on October 18, 2018 the Supreme Court directed the Federal government to recover the royalties that had not been collected from the International Oil Companies for the past 18 years. Based on the judgment of the apex court the Federal government has demanded for the immediate payment of the sum of the sum of $62 billion by the defaulting oil companies. But the affected oil companies have filed fresh suits in the federal high court challenging the claim of the federal government. It is hoped that the federal high court will speed up the hearing of the new cases in view of the categorical pronouncement of the Supreme Court on the right of the federal government to recover the outstanding royalties.
2. The National Extractive Industry and Transparency Initiative (NEITI) has disclosed that sum of $22 billion and N481 billion has been withheld from the Federation Account by the NNPC and some oil companies. Without any justification whatsoever the federal government has ignored the findings of the NEITI. Convinced that the Federal Government has violated the provisions of the NEITI Act we have instituted an action at the federal high court seeking for the implementation of the findings of the NEITI.
3. A group of Nigerian lawyers engaged by the NIMASA found that the crude oil stolen from Nigeria by well known oil and shipping companies between 2011 and 2014 and discharged at the Philadelphia Port in the United States was 60.2 barrels. The said stolen oil has been valued at $12.7 billion. Curiously, all efforts to persuade the federal government to recover the fund have fallen on deaf ears. Out of sheer frustration the lawyers who indicted the oil and shipping companies have instituted civil suits in the federal high court for the recovery of the said sum of $12.7 billion.
4. In the course of our work on leakages in the national economy, we discovered that sometime in 2006 the management of the Central Bank of Nigeria illegally withdrew the sum of $7 billion from the nation’s foreign reserves and fixed same in 14 commercial banks. For reasons best known to him, the Governor of the Central Bank, Mr. Godwin Emefile has ignored our persistent demand for the recovery of the principal sum of $7 billion and the accrued interests from the 14 commercial banks.
In the light of the foregoing, it is clear that apart from the expected revenue of $1.5 billion from the implementation of the amended Deep Offshore and Inland Basin Production Contracts Act the outstanding royalties, fixed deposit and other funds withheld or diverted from the Federation Account are not less than $103.7 billion.
If the National Assembly, under your able leadership, is prepared to resist pressures from vested interests and muster the political will to recover the said fund Nigeria will have no business begging for foreign loans from China, African Development Bank and the World Bank. Therefore, the National Assembly may wish to collaborate with the anti graft agencies in the recovery of the said sum of $103.7 billion without any delay.
Please accept the assurances of our highest esteem.
FEMI FALANA, SAN FCI Arb.
CC: Femi Gbajabiamila Esq.
House of Representatives,
National Assembly Complex,
Third Arms Zone,