The projected lost revenue, according to analysts could fund Nigeria’s combined annual federal health and education budgets twice over.
Nigeria lost an estimated $6 billion to the controversial deepwater block Oil Prospecting Licence (OPL) 245 deal, a new analysis from world-class oil experts revealed.
The projected lost revenue, according to analysts could fund Nigeria’s combined annual federal health and education budgets twice over.
This was made known on Monday, November 26, 2018, during a presentation of an analysis jointly inaugurated by the Human and Environmental Development Agency, Global Witness, RE: Common and The Corner House.
Industry experts at the Resources for Development Consulting, a research-focused organisation conducted the analysis.
ALSO READ: How Nigeria wasted $1 trillion during five major oil booms - Report
Revelations from the report
According to the report, leaked documents from Shell had suggested the oil giant capitalised on the 2011 presidential election to get the federal government to sign the deal.
Shell and Eni have denied any wrongdoing, reiterating that they had acted correctly in the purchase of OPL 245.
The two oil giant along with a number of their senior executives have involved in lawsuits for their alleged role in the deal.
What Nigeria lost
The Resources for Development Consulting projected that Nigeria lost an estimated $4.5 billion based on 2003 fiscal terms on the deal.
Projecting further, they said the federal government lost N5.86 billion over the lifetime of the project based on 2005 fiscal terms.
The firm used a discounted cash flow analysis model made up of elements including fiscal terms, field data from various sources, an oil price assumption of $70 a barrel to arrived at the figure.
Don Hubert, founder and president of Resources for Development Consulting, said the fiscal terms governing the OPL 245 deal only favoured Shell and Eni.
“The payment of $1.1 billion dollars in 2011 was not only a payment to secure rights to OPL 245, but the payment also served fiscal terms that were highly generous to the IOCs (International Oil Companies) but were highly detrimental to the government of Nigeria,” he said.
“The lack of profit oil in the current fiscal terms that is governing OPL 245 will result, our analysis shows, in a loss to the Nigerian people of at least $4.5 billion.”
Barnaby Pace from Global Witness said the report shows how the terms of the agreement were in the favour of the two oil giants. Pace said globally there is call on the Nigerian government to revoke the licence so that its estimated $6 billion losses will be stopped in its track. "We also call for contracts to be made public.”
ALSO READ: 5 things you should know about Malabu Oil deal and JP Morgan’s involvement
Middlemen in the controversial Malabu deal bag jail terms
In August 2018, a Milan court sentenced Nigerian man, Emeka Obi and an Italian middleman to four-year jail terms over $1.1 billion Malabu oil fraud. Shell and Eni denied the two 'middlemen'.
Brief background issue on Malabu oil deal
The two international oil and giants - Royal Dutch Shell and Italian Agip-Eni - paid out about $1.1 billion to Dan Etete, Nigeria's former petroleum minister who had previously been convicted of money laundering in France.
The payment and oil deal became a subject investigation and several Nigerian government officials were believed to have received several million dollars in bribes for the enabling roles they played.
Nigeria’s OPL 245 is one of the biggest sources of untapped oil reserves on the African continent with reserves estimated at 9 billion barrels.
from pulse.ng - Nigeria's entertainment & lifestyle platform online
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