Voices of Diezani and Indian envoy Ghanashyam on $15bn oil palaver
As the journalist who interviewed the Indian High Commissioner on the $15 billion oil issue, it is appropriate for me to comment on the arguments. The spirit of the interview goes thus: ‘if Nigeria treats oil buyers shabbily, we stand the risk of losing buyers of our oil to competitors. Already, Iran is about to wet the world with its oil; Saudi Arabia is granting discounts, including transportation of crude oil from their country to buyer-countries free of charge.’
Listen to the voices:
Read the voice of the Indian High Commissioner below:
1. The former Minister of Petroleum Resources, Mrs Diezani Allison Madueke, failed to sign a long-term agreement with New Delhi, Nigeria’s Number One oil buyer, but rather used intermediaries in the annual $15 billion deal, the Indian High Commissioner to Nigeria, Ajjampur R. Ghanashyam, has revealed.
Speaking in an interview with Daily Trust on Sunday at the weekend, the High Commissioner stated that Nigeria is the only country who uses intermediaries in its oil deals with India, saying, “From other countries, when we buy oil, whatever we want to pay, we pay to the Ministry of Finance of that country. In Nigeria, we pay to intermediaries. We would like to be dealing directly with the Nigeria National Petroleum Corporation (NNPC). It’s not a good thing. Why should we go through intermediaries? Secondly, we would also like to have long term agreement, which we have with many countries: Iran, Iraq, Saudi Arabia, and other countries from where we buy oil. Nigeria is the only country with whom we don’t have an agreement. .. When we write a letter to NNPC, we don’t get a response.”
2. In 2006, an Indian company, Oil & Natural Gas Commission Videsh Limited (OVL) and Mittal Energy International, which is a joint venture between OVL, an Indian government company, and Mittal Energy a private firm, applied for oil concession. The Signature bonus sum of $25 million was paid, but neither was the oil concession granted nor the money paid returned to the Indian companies.
He lamented the situation thus, “How many years is it? Nine years. Even to get the concession is not possible, and the money is not refunded to us. For nine years your country has been sitting on this, and they make us go round and round and round. We buy $15 billion worth of crude oil per year and we have the potential of importing $50 billion worth of crude oil from Nigeria. We can buy more because our requirement is going up. But if you continue to make us to pay through agents, and continue to ask us to buy from the swap market, it means you don’t trust us, and if you don’t trust us, we have to look for those who trust us more. We are making concessions to Nigeria by buying your crude oil because you’re our old friends and we’ve been friends for a long time, and your crude oil is better quality. But you must take our interest into account.”
Read Diezani’s voice
Today, the former Minister of Petroleum, Mrs Diezani Allison Madueke, opened up on the $15 billion oil deal and $25 million paid by India an oil concession, which was never granted. In her reaction to the Indian High Commissioner to Nigeria, Ajjampur R. Ghanashyam, through her lawyers, Messrs Chike Amobi and Co., the former Minister raised the following points:
1. On the $25 million signature bonus paid by Indian firms for oil concession, she said, “Mr. Ajjampur R. Ghanashyam’s acrimony towards our client is due to the refusal of the Federal Government of Nigeria to allow OVL default on its contractual obligation to Nigeria in the case of: A $ 6 billion investment, (around RS 36, 600 crore) in an 180,000 barrels (bpd) Greenfield refinery and the 2,000 megawatt power plant or railway line from East to West of Nigeria.”
2. On India’s request for government-government oil deal, Diezani “averred that the established procedure stipulates that the buying country, in this case India, selects and presents a local company as its agent to transact on its behalf as it is never the responsibility of selling country to select or nominate a company for the buying country. She maintained that Nigeria never dictated nor suggested any intermediary or marketing company for India for the purposes of the said transaction.”
1. It is clear that there is the lack of communication between the Minister and the Indian High Commission on the two issues. If letters, emails and text messages were replied, there wouldn’t have been any need for this altercation.
2. If other countries do government-to-government deals on oil contracts, why is the case of Nigeria different? Why must we use intermediaries who cut commission when there’s an option of direct deals?
3. Did the Ministry of Petroleum Resources inform the Indians that the oil concession was rejected because the company(ies) involved failed to meet other conditions for the grant of that concession? If so, where is the evidence?
4. The incoming Minister of Petroleum should learn to communicate promptly. It is apparent that such dilly-dallying attitude of government could lead to the loss of oil buyers, and this could be bad for Nigeria, especially now that oil prices are plunging and other crude oil producers are kneeling down before buyers for patronage.