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Jonathan Dangles Oil Blocks to APC leaders; Tinubu, others targeted

Source: huhuonline.com
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31 marginal fields are on the auction block; but who gets what will depend on the shifting political equation ahead of legislative and presidential elections in 2015.

A sinister plot to factionalize and destabilize the opposition ahead of next year's legislative and presidential elections involving the long-running practice of using oil blocks in shady quid pro quo vote-buying deals in party leadership contests is now being fine-tuned in the presidency, Huhuonline.com has learnt from Aso Rock sources. Having lost the numbers game with the defection of 37 PDP lawmakers to the APC; and with more defections to follow in the Senate, President Goodluck Jonathan is facing the battle for his own political survival on two main fronts: within his own party where some northerners and southern hardliners are opposed to his re-election, and in the general election itself where the deck is stacked in favor of an eventual APC candidate.

Jonathan has therefore decided to wield the carrot and the big stick, by going back to the form book of his predecessors. Huhuonline.com learnt from presidential sources that the strategy involves using oil blocks to woo prominent APC chieftains like Bola Tinubu, Chief Bisi Akande, Governor Rotimi Amaechi and other top-notch opposition leaders such as Nasir El-Rufai and former Vice President Atiku Abubakar who could stand in the way of Jonathan's 2015 presidential ambitions. For added advantage, the anti-graft agencies will be on standby; ready to harass the opposition chieftains, most of whom are former barons of the regime with skeletons in their cupboards that could be exhumed by the EFCC.

The source noted that the primary target are the 'older generation and former PDP members; they are politicians with clout who have built a formidable following in their domain. They have name recognition and will see reason in supporting Jonathan, the devil they know against moving into uncharted territory or being part of complex inconsequential political arrangements in the APC with doubtful outcomes.' The source also added that Tinubu is the first APC bigwig who has been proposed oil blocks since he is already an oilman with his company Oando. The source further explained that Tinubu's Action Congress of Nigeria (ACN) essentially engineered the initial merger, with Gen. Muhammadu Buhari's moribund Congress for Progressive Change making them the principal leaders of the APC. The PDP will orchestrate a schism over Buhari's long-standing ambition to be president as a justification for Tinubu and his followers to back out of the APC and back Jonathan for the presidency.

The lynchpin in the plot is the almighty Oil Minister Diezani Alison-Madueke who officially announced last November 28 that 31 marginal fields were to be put on the market at the same time, the Nigeria Petroleum Development Corporation (NPDC) announced it is selling its operatorship rights on several blocks that Royal Dutch Shell is auctioning off in the Niger Delta as part of its divestment program. Although Alison-Madueke claims the transactions will unfold in full transparency, the fact that elections are looming large has triggered much behind-the-scenes horse trading within the PDP and its rambling army of hardcore adherents and desperate power seekers, including dissenters like Babangida Aliyu and his Jigawa State counterpart, Sule Lamido; influential actors within the PDP, who are players with deep knowledge of political foot-shuffling. This issue of oil blocks was discussed when Aliyu and Lamido met with Jonathan at the villa last weekend.

The strategy went into full throttle when the Department of Petroleum Resources (DPR) last month began show-casing the oil fields in question in Lagos, Port Harcourt, Kaduna and Abuja; without publishing the lists of permits. The first pre-qualification round will be held in January and firms chosen to bid will have until early March to submit their technical and financial offers and the winners would be known by April. Companies involved must be at least 51% owned by Nigerians and none will be able to bid for more than three fields. But the information has been kept secret and circulated only among companies with very high political connections such as Talaveras, Petrobay, Seplat and the Transcorp conglomerate. Some of the companies, indeed, have already told the DPR what oil fields they are interested in and even went further saying how much they're willing to pay. Among the 31 fields on the list, a copy of which was obtained by Huhuonline.com include: the Egbolom field on OML 23 that was previously operated by Shell in Rivers state; the Uzuaku field on OML 11 in Ogoniland; three offshore fields on OML 100 (Usoro, Ikong Ibiom) and two on OML 67 (Amaniba and Ekpat).

In addition to these insiders, other pre-qualified companies include Glencore E&P in conjunction with Nigeria's Yinka Folawiyo and Nestoil; and South Atlantic Petroleum owned by former defence minister Theophilus Danjuma in conjunction with Russian firms Vertex and Pamplona. Huhuonline.com learnt that for all his efforts keeping Jonathan's second term bid alive, PDP Chairman Bamanga Tukur will get an oil block through his son-in-law, Sheriff, who is married to Tukur's daughter born with his 4 th wife, Mariam, an Ijaw like Jonathan. Sheriff is the son of Bola Shagaya, one of Nigeria's wealthiest women and a close friend and confidant of Jonathan's wife, Patience; who is involved in Bayelsa Oil Company, Britain's Heritage Oil partner in the brand new JV Petrobay Energy; through which Heritage is expected to win several Shell fields in the Niger Delta, including the oil-rich OML 29 in Bayelsa state.

In the race to buy Shell's stakes on OML 18, 24, 25 and 29, the NPDC is an invisible referee and player at the same time. Counting on his connections, Sheriff is expected to win not only Shell's fields but also the status of operator on them. Following Shell's departure, that role would theoretically fall to the NPDC. But NPDC recovered operatorship of three permits last year (OML 30, 40 and 42) which Jonathan hopes to use as carrots to secure re-election in 2015. The recipients of these oil blocks will then sell them to foreign partners and pocket their commissions running into millions of dollars.

Oilmen wheeling and dealing
Amongst the most notable allocation of oil blocks include OML 110 awarded in 1996 by Gen. Sani Abacha to Cavendish Petroleum owned by Alhaji Mai Daribe, the Borno Patriarch. With an estimated 500 million barrels of oil, this block is worth $50 billion in reserves using average benchmark of $100 per barrel. Abacha also awarded OPL 246 which produces 300,000 bpd to Sapetro owned by Theophilus Danjuma in 1998. This block was so lucrative that Sapetro divested its investment for $1 billion. In 1999, Abdulsalami Abubakar awarded OML 112 and OML 117 to Amni Int. Petroleum Development Company owned by his in-law, Colonel Sani Bello. Amni runs Afren plc and Vitol. Afren and Vitol operate Ebok oil fields in OML 67 with 300,000 bpd owned by Babangida's in-law Alhaji Mohammed Indimi, from Niger state. Former Oil Minister and OPEC chairman, Rilwanu Lukman, also has stakes in all these companies.

Seplat Petroleum owned by Prince Nasiru Ado Bayero, cousin to Central Bank Governor Sanusi Lamido Sanusi operates the Asu Okpu/Umutu fields with a capacity of 300,000 bpd which translates to $30 million daily at a benchmark of $100 per barrel. Bayero also has stakes in Intel owned by Atiku and late former President Yar'Adua. The most controversial block was OML 245 worth over $20 billion awarded by Abacha to Malabu Oil & Gas owned by his Oil Minister Dan Etete. In 2001, Atiku got Obasanjo to revoke the license but Etete was later paid over $1 million in a shady deal involving Jonathan in 2011.

Obasanjo awarded OPL 233 and 289 to Cleanwater Consortium, comprising Cleanwater Refinery and RivGas Petroleum and Gas owned by Peter Odili; whose brother-in- law, Okey Ezenwa runs the consortium as Vice Chairman. Baba also gave OPL 286 to Focus Energy in partnership with BG Group, a British oil concern, run by Andy Uba through proxies. OPL 291 was awarded by Obasanjo to Starcrest Energy Nigeria Ltd, owned by Emeka Offor, who later sold it to Addax for a mouth-watering $35 million. Mike Adenuga's Conoil owns six blocks and exports over 200,000 bpd. In April 2011, Adenuga attempted to buy Shell's OML 30 for $1.2 billion, but the deal was blocked by Alison-Madueke; who later short-changed Nigerians by selling the block to Heritage Oil for $800 million.

This unorthodox practice which began under Babangida has been perfected by successive Nigerian presidents who discretionarily use oil blocks to dispense patronage to friends, cronies and mistresses without due process. Jonathan hopes to trade-off these operating licenses to opposition leaders who agree to rally behind his 2015 presidential ambitions. Tinubu is believed to control the Southwest which Jonathan must win, to give himself any shot at the presidency. Tinubu is vulnerable because of his indebtedness to Jonathan. The former Lagos State governor was all but certain to be jailed by the ICPC, but he scurried to the Villa and after meeting the President, the case against him was dismissed.

There are also speculations that Atiku has the option to talk with the APC or move his followers in the PDM to raise the hand of Jonathan. It is widely believed that Atiku is keeping afloat and financing the PDM since the death of its founder, Shehu Yar'Adua, to be a stand-by strategy for him as a negotiation platform when the chips are down. Tradition has it in Nigeria that election years are always preceded by a huge sell-off of oil licenses. Looking ahead to legislative and presidential elections in 2015, Jonathan is making sure everything both in the book and outside is being put into capturing the ticket.