Expert analysis reveals Nigeria lost $7bn in OPL 245 deal

A new expert analysis on the controversial Oil Prospecting License (OPL) 245 deal has been presented, indicating that the Federal Government would be losing about $7bn.

The analysis was presented by the Canada-based Resources for Development Consulting which in November 2018 published its report exposing under-valuation of the OPL 245.

Dr. Don Hubert, President of the consulting agency which assists oil rich countries to secure a fair share of government revenue from petroleum and mining also declared that Nigerian government is not getting the right profit from its oil resources.

Hubert spoke during the Public Presentation of the New Expert Analysis on the OPL 245 deal and high level training of stakeholders taking place in Abuja between April 29 and 30, 2019 organized by the Human and Environmental Development Agenda (HEDA).

The training which had in attendance representatives of anti-graft agencies and relevant government agencies was held in collaboration HEDA partners - Global Witness, The Corner House and Re: Common.

Hubert said the conclusion in its report show that the 2011 Resolution Agreement (RA) between Nigeria and Shell/Eni was “prejudicial to the interest of Nigeria.”

It was therefore estimated that Federal Government would lose N5.86 billion over the lifetime of the project based on 2003 and 2005 fiscal terms.

He explained that having worked with other oil producing nations in the world, it was discovered that “Nigeria is not getting full share of revenue from the deep water blocks”.

“Nigeria’s share in the deep water blocks is below what we would expect in other countries,” he reiterated.

He said, “The main challenges are related to the complexities of different fiscal regimes. Nigerian system is quite complicated compared to other countries and there were very unusual provisions in the resolution agreement.”

Shedding more light on the issue, Chairman, HEDA Resource Centre, Mr. Olanrewaju Suraju said going by the initial $1.1bn bribe paid to Nigerian officials for the award of the OPL 245, the country would be losing about $7bn from the illegal deal.

He said, “What was supposed to come to Nigeria as part of the profit oil was what was calculated and paid in advance by the oil companies to individuals and public office holders of Nigeria. So money that was meant to provide for health and education was actually paid to individuals to buy private jet and luxury apartments outside the country and we have also seen that some of the conditions under which that allocation is made is only akin to what we had under the military regime where there was no accountability and transparency in the management of the natural resources.