- As CBN Gov Reps: I won’t appear before you, over Ikoyi cash
A German oil producer has been accused by the head of Libya’s National Oil Corporation of withholding more than $900m (£697m) from the Libyan state and colluding with unlawful efforts by Libya’s UN-backed government to take over the sale of the country’s vastly profitable oil contracts.
The power struggle between the NOC and Wintershall – which denied that it owed any money and said it had always met its obligations to the state – has long-term implications for global oil prices and the Libyan economy, since more than 80% of Libyan state revenues derive from oil.
Despite Libya’s political crisis, oil production has been gradually increasing of late, reaching 800,000 barrels per day. The NOC is seen as one of the few bipartisan Libyan institutions capable of keeping out of the political infighting that has dogged the country since Muammar Gaddafi fell in 2011. Libya was producing 1.6m barrels per day before the uprising, and the NOC has said output in 2017 could reach between 1.1m and 1.2m barrels per day if political obstacles are removed.
The NOC argued that the battle with Wintershall, and the support the company has enjoyed from the UN-backed government, was vital to its ability to keep control of decisions on oil contracts away from politicians, and ensure that the maximum amount of revenue reaches the state coffers.
Documents seen by the Libyan attorney general’s office suggest that Wintershall knew before the NOC chief Mustafa Sanalla about a controversial move by the UN-backed government to take over control of decisions on the terms of oil contracts and investments from the NOC.
The legal status of the move, which occurred in March and is known as resolution 270, is now unclear after an appeal court in Benghazi ruled on Monday that the UN-backed government had over-reached itself.
Libya’s UN-backed government, led by Fayez Serraj in Tripoli, is known as the presidency council.
Based in Kassel and part of the chemical BASF Group, Wintershall is the oldest established oil company in Libya, and is regarded as being better positioned than other foreign oil firms to increase oil production in Libya.
Sanalla claimed that Wintershall had “tried to interfere with the Libyan internal politics and to take advantage of the fact that the state is so weak”. He also alleged that staff nominally advising the presidency council had previously been employed by Wintershall for years, and that the council was making political decisions such as resolution 270 that “were written by Wintershall and designed to help Wintershall”.
In 1966 Wintershall was granted two concessions in the East Sirte basin, 1,000 km south of Tripoli. By 1996, the concessions were capable of producing 100,000 barrels per day.
Sanalla said a memorandum of understanding was signed in August 2010 extending these two concessions, on the condition the terms of the concessions were made more favourable to the government, bringing them into line with the type of contract agreed by other foreign oil operators in Libya. He said Wintershall had not honoured this agreement.
The total liabilities the NOC are likely to claim may amount to more than $900m.
In the meantime, the Governor of the Central Bank of Nigeria, Mr. Godwin Emefiele, has declined to appear before the House of Representatives to testify in the ongoing investigation into the $43.4m (about N13bn) recovered by the Economic and Financial Crimes Commission from an apartment at Osborne Towers, Ikoyi, Lagos.
The House Committee on National Security and Intelligence chaired by an All Progressives Congress lawmaker from Zamfara State, Mr. Aminu Sani-Jaji, is conducting the investigation.
Other sums recovered from the apartment were £27,800 and N23.2m.
The committee had thrice summoned Emefiele; the suspended Director General of the National Intelligence Agency, Dr. Ayo Oke; the Acting Chairman of the EFCC, Mr. Ibrahim Magu; and the National Security Adviser, Maj.-Gen. Babagana Monguno (retd.) to testify.
The third sitting of the committee was Wednesday (yesterday).
But, like in two previous occasions, all the officials shunned the committee on Wednesday.
However, Emefiele wrote the lawmakers to say that he did not think it was appropriate for him to come because he would be in breach of the National Security Agencies Act.
In the letter, which was read out to members by Sani-Jaji, the CBN governor argued that the Act prohibited the disclosure of security information publicly.
He noted that security information was ‘classified information’, which the law barred him from releasing to the public.
The CBN governor further argued that a committee chaired by the Acting President, Prof. Yemi Osinbajo, had already investigated the cash recovery.
But the lawmakers were enraged and berated Emefiele for acting like ‘someone who lacks the capacity to differentiate between a legislature and the executive arm of government’.
Sani-Jaji stated, “This CBN governor doesn’t even know that there is something called separation of powers.”
Guardian with additional report from Punch