4 September 2019
As war of words continues over potential loss of assets, mixed messages of negotiation and scam emanate from government
Nigeria’s top government officials have met to discuss their next move in the $9bn (£7.4bn) energy scandal that is poised to cost their economy dear.
As they exited Monday’s high-level meeting, chaired by vice-president Yemi Osinbajo, the participants remained tight-lipped, refusing to comment on the talks.
The gathering included minister of state for petroleum Timipre Sylva, Mele Kyari, the group managing director of the Nigerian National Petroleum Corporation, and the minister of information Lai Mohammed, who last Thursday announced that the government was ready to negotiate a settlement to prevent the seizure of $9bn in assets, following last month’s UK court decision to enforce an order against the country for breach of contract.
But the announcement was marred by accusations of “falsehoods and scam”, increasing the controversy over how Nigeria is managing the dispute, which spans the administration of three presidents: the late Umaru Yar’Adua, Goodluck Jonathan and current leader Muhammadu Buhari.
Mohammed said: “We’re leaving no stone unturned to resolve this matter. We are ready to sit down with them [British engineering firm Process & Industrial Development Limited (P&ID), who allege breach of contract] and negotiate what is reasonable to all parties. You don’t inflict this kind of injury on a country and its people.
“Nigerians can rest assured that everything is being done to make sure that the country is not shortchanged in this case.
“P&ID have the resources to hire the best PR agencies in the world to spread this falsehood. And without internal collaborators, external conspirators will not succeed. We will find those involved in this scam, either inside or outside government.”
The dispute arose out of the two parties signing a contract in 2010 to oversee the conversion of Nigeria’s wet gas resources into usable dry gas. The deal, if completed was to have earned P&ID billions of dollars in profit.
Following arbitration, which the government lost, P&ID successfully applied to the high court in London for an order that allows them to seize $9bn in assets belonging to the country. Representatives of P&ID are now actively seeking to identify property and other resources that could be seized.
Nigeria’s offer to negotiate is being treated with caution and scepticism by P&ID’s representatives after Mohammed went further by saying that the government would do everything within its power to ensure that those involved are exposed and prosecuted.
“The contract itself was not justifiable and I know that the Economic and Financial Crimes Commission, Ministry of Justice and other bodies investigating the contract will come up with facts on how the whole thing was done. The government will not sleep until this matter is resolved in a manner that will not injure the interest of Nigeria,” said Mohammed.
Representatives of P&ID challenged Mohammed’s comments, outlining a catalogue of inaction by successive administrations that led to the current position, which risks the country losing a fifth of its foreign reserves.
“If the Nigerian government is serious about a willingness to negotiate then it must do so in good faith. This means that the Buhari administration must acknowledge the reality of the rulings, desist from its campaign of baseless slander and sham investigations against P&ID, and instead appoint an authorised party to enter into real negotiations,” said a spokesperson for P&ID.
Three days ago, P&ID published a timeline of events on its website, which they say demonstrates the government’s missed opportunities to resolve the dispute, going back to May 2015 when P&ID offered to settle the dispute for $850m.
According to the timeline, after a period of inaction, Nigeria’s attorney general, Abubakar Malami, confirmed that his office had taken over arbitration talks from the petroleum ministry in June 2016 and had appointed his own legal team which, in August 2016, defended a hearing to determine the damages payable. This resulted in a later order instructing Nigeria to pay $6.5bn plus $2.3bn in interest. Both sides then agreed a “60-day standstill agreement” at the behest of the Nigerian government but again, no negotiation took place.
In April 2017, Malami’s lawyers blamed bureaucracy for the delay in the government being able to “determine a reasonable strategy after receipt of the award”, adding that they now had “the authority of the vice-president” of Nigeria to meet with P&ID to negotiate terms.
In the buildup to this month’s high court hearing, when P&ID sought to convert the award to an enforcement order, it is alleged the government again failed to act. Applying for a time extension claiming that “the notification of the hearing had not been immediately filed and not passed up the chain of command”, while in the US where P&ID also filed a petition, Nigerian government lawyers claimed they “had been instructed to enquire about the potential for a settlement”.
The P&ID website alleges that the Buhari administration “took the decision to gamble on the arbitration and turned an $850m liability into a $9.6bn liability”.
“The coming days will tell if the Nigerian government is serious, or if this is simply another delay tactic,” said a P&ID spokesperson.
By Rod Austin. This piece first appeared in the UK’s Guardian.