Unveiling the Oil Monopoly: A Deep Dive into Nigeria’s Oil Industry Exploitation

Understanding the Oil Theft Process in Nigeria

Importation and Exportation Dynamics:

1. Importation:

• Licenses: NNPC grants importation licenses to a select group of oil companies responsible for bringing petroleum products into the country. These companies set the prices for these products and are often referred to as “oil marketers” in the media.

1. Exportation:

• Another set of companies, including NNPC and a few partners, is responsible for exporting and selling unrefined petroleum products both locally and internationally. High-ranking government officials, military leaders, and politicians are involved in this sector, contributing to oil theft.

How Oil Exportation and Importation Works in Nigeria

Understanding the process is crucial for grasping the larger picture:

1. Extraction: Oil is extracted from the ground using drilling rigs.
2. Processing: The crude oil is exported internationally to refineries where it is processed into refined products.
3. Transportation: The processed oil is transported from refineries to storage tanks, blending facilities, and ports, typically via pipelines or ships.
4. Export: At the port, the oil is loaded onto tankers or other vessels and shipped to Nigeria and other countries.
5. Sale: The oil is sold to buyers in Nigeria at a price set by the importer (oil marketer). The government subsidizes a significant portion of the oil price to make it more affordable for citizens, a practice known as fuel subsidy.

The Acquisition of Agip Oil by Oando PLC

Recently, Oando PLC announced the approval to acquire 100% of Nigerian Agip Oil Company. This effectively means that the Tinubu family now owns Agip Oil, which is part of Eni S.p.A., an Italian multinational oil and gas company.

• Operations: Agip Oil operates 17 onshore oil blocks, producing 11 million barrels of oil and condensates annually, and manages the Bonny natural gas liquefaction plant.
• Significance: Observing similar situations, like the case with Dangote, suggests that this sale was not made lightly. Now, crucial oil fields and plants in Nigeria are under the control of Tinubu through Oando PLC, not NNPC.

History and Ownership of the Ras Hanzir Oil Terminal

Historical Background

The Ras Hanzir Oil Terminal, located in the Grand Harbour of Malta, has a long and storied history as a critical hub for oil storage and distribution in the Mediterranean region.

1. Early Development:

• The Ras Hanzir area has been used for various industrial purposes for decades. The strategic location of the terminal in the Grand Harbour made it an ideal site for oil storage and shipping.
• Initial infrastructure developments in the area were influenced by Malta’s role as a key logistical point in the Mediterranean, particularly during and after the World Wars.

1. Post-War Expansion:

• Following World War II, the terminal underwent significant expansion to accommodate increasing oil storage and handling needs. The development included modernizing storage tanks and improving facilities to handle larger volumes of oil.
• By the mid-20th century, the terminal had become a vital part of Malta’s energy infrastructure, serving both local needs and acting as a transit point for oil shipments.

1. Privatization and Modernization:

Recent Developments and Ownership

1. Acquisition by Ras Hanzir Oil Terminal Limited:

• Ras Hanzir Oil Terminal Limited, a company owned and operated by the Tinubu family, won the bidding for the tender. This acquisition marked a significant shift in the ownership and operational control of the terminal.
• Wale Tinubu, the chairman of Oando PLC, serves as the chairman of Ras Hanzir Oil Terminal Limited, along with other members of the Tinubu family and their associates.

1. Strategic Importance:

• The acquisition of the Ras Hanzir Oil Terminal by the Tinubu family has strategic implications for both Malta and Nigeria. It facilitates the processing and blending of oil products in Malta, which are then shipped to Nigeria and other markets.
• This move aligns with broader strategies to control oil refining and distribution channels, allowing the owners to capitalize on both local and international oil markets.

The Ras Hanzir Oil Terminal has evolved from a key industrial site in Malta to a strategic asset in the global oil trade. Its acquisition by the Tinubu family underscores the terminal’s importance in the broader scheme of oil refining and distribution, linking Malta’s infrastructure with Nigeria’s oil industry. This historical and operational context highlights the ongoing significance of the Ras Hanzir Oil Terminal in the Mediterranean and beyond.

The Malta Connection

With control over substantial oil reserves in the Niger Delta and the ability to explore further through Agip Oil, their next step is refining. Instead of building a refinery in Nigeria, they opted to construct one in Malta.

• Tender in Malta: In early 2021, Enemed Co Ltd, Malta’s leading fuel supplier, issued a tender for leasing storage tanks and a blending facility at the Ras Hanzir Oil Terminal. Ras Hanzir Oil Terminal Limited, owned and operated by the Tinubu family, won the bidding. Wale Tinubu, chairman of Oando PLC, serves as its chairman, along with other Tinubu family members and associates.

The Impact of Subsidy Removal

After Tinubu was sworn in as president, his first major move was to announce the removal of the fuel subsidy, while the government continued to pay it in secret, allowing him to increase petroleum product prices. This move was designed to benefit his own monopoly.

• Monopoly Expansion: With the forced acquisition of Agip Oil by Oando PLC, Tinubu has become the largest oil exporter, explorer, and marketer in the country, second only to NNPC.

The Scheme Unveiled

Here’s the pattern: Tinubu, through NNPC, will sell Nigeria’s oil to himself at a low price via his company in Malta. He will also explore, extract, and export oil using his newly acquired Agip Oil Company, operating across the Niger Delta states.

• Exploration and Refining: Tinubu will then buy back the refined oil from his company in Malta through NNPC and as an oil marketer via one of his companies, OVH Energy (Oando), at a higher price and export it back to Nigeria.
• Pricing and Subsidy: The refined oil is sold to the Nigerian public at a high price, while the subsidy, although officially removed, is still being paid secretly. Essentially, Tinubu is paying himself the subsidy.

The Future of Nigeria’s Oil Industry

This scheme represents an extraordinary level of financial exploitation. Even after leaving office, and ensuring Nigeria remains without a refinery, Tinubu’s oil monopoly over the country will persist. Moreover, the government will continue to pay him for the subsidy.

• Revenue: He sold over 2 billion dollars worth of petroleum products to Nigeria through the Malta refinery in 2023 alone. This is a glimpse of the future of Nigeria’s oil importation.
• Opposition to Competition: He will fight the Dangote refinery with everything he has; if it becomes operational, his multi-trillion-naira oil monopoly enterprise will collapse.

The price of petroleum products like fuel will keep increasing while he still pays himself the subsidy. Considering his age, one might wonder what he needs all this money for, other than sheer greed. It’s truly disheartening.

Conclusion

The investigation reveals a deeply entrenched system of exploitation and corruption within Nigeria’s oil industry, with significant implications for the country’s economy and citizens. The monopolistic control and the manipulation of oil prices and subsidies highlight the urgent need for transparency and reform in the sector.

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