On March 17, 2022, Tony Elumelu, the chairman of UBA Group lashed out at the federal government over what he termed bad governance.
The billionaire was really pained that Buhari’s administration is doing almost nothing to combat rate of criminality in the country, especially when security agencies can’t put a stop to oil theft despite the amount of tax being collected.
Elumelu suggested in strong terms that accountability should be demanded from Nigerian leaders and the citizens must use the forthcoming election to effect change.
Rather than being excited that for the first time, a billionaire aligned with the masses to speak to the powers in Abuja, the outburst came as a shock to many Nigerians.
The chairman of Heirs Holdings has notably been one of the few wealthy Nigerians actually giving back to the society and Africa as a whole through his foundation, Tony Elumelu Foundation. As a matter of fact, the non-governmental foundation had been at the fore-front of grooming future leaders which, as projected by Freelanews in one of its reports, would create 30million jobs across the continent by 2053.
Infact, it was due to this projection in part, Tony Elumelu, through his foundation and UBA Group, was named Most Impactful CSR Initiative of the Decade (Africa) at TheFLEA Awards., an annual awards event powered by Freelanews.
However, his latest rantings didn’t seem to sit well with many Nigerians, especially when a widely circulated article seemed to take the shine off Elumelu’s alleged solidarity with the masses.
According to the article credited to a Chukwudi Iwuchukwu, it claimed that Elumelu’s grievances at the government was hinged on the losses his company, TNOG Oil and Gas Limited, a related company of Heirs Holdings and Transcorp, suffering due to oil theft.
Recall that in January 2021, Heirs Oil & Gas, the sole operator of OML 17 in the Niger Delta, announced the acquisition of 45% interest in OML 17 from Shell, Total and Eni, for $1.1billion. It generated much noise because it was reputed to be one of the largest oil deals in Africa at the time.
“We have a very clear vision: creating Africa’s first integrated energy multinational, a global quality business, uniquely focused on Africa and Africa’s energy needs. The acquisition of such a high-quality asset, with significant potential for further growth, is a strong statement of our confidence in Nigeria, the Nigerian oil and gas sector and a tribute to the extremely high-quality management team that we have assembled. As a Nigerian, and more particularly an indigene of the Niger Delta region, I understand well our responsibilities that come with stewardship of the asset, our engagement with communities and the strategic importance of the oil and gas sector in Nigeria. We see significant benefits from integrating our production, with our ability to power Nigeria, through Transcorp, and deliver value across the energy value chain.
“I would like to thank Shell, Total and ENI, for the professionalism of the process, the Federal Government of Nigeria, the Ministry of Petroleum Resources, and the NNPC for the confidence they have placed in us,” Tony Elumelu stated.
And since the establishment of a link between Elumelu’s March 2022 outburst and acquisition of OML 17 in January 2021, many wondered what could have gone south barely over year between him and a government he once highly praised.
Iwuchukwu, in his theory, claimed that the oil bloc Elumelu bought had a production capacity of 27,000 barrels per day before it was sold to him and the latter was shocked to realise that after the deal has been sealed it was producing below capacity.
“Last year, Tony mobilised everything he had, including a bank loan and his extensive political connections in Abuja, to buy an onshore oil well from oil giant Shell that wanted to divest from onshore fields in Nigeria.
“The oil well was worth $1. 1 billion (600 billion), which he paid with his own money (equity) and was supported by a large number of private banks and development institutions, including Afreximbank, ABSA, Africa Finance Corporation, Union Bank of Nigeria, Hybrid Capital, and the Amundi Fund.
“The oil block known as the OML 17 block, which holds oil and gas reserves, had a production capacity of 27,000 barrels per day before it was sold.
“This block is located onshore, a few dozen kilometers north of Port-Harcourt and its 2P reserves (proven and probable) amount to 1.2 billion barrels. It has 15 gas and oil wells, six of which are producing, according to Wood Mackenzie, a research company.
“After paying for the OML 17 block,Tony Elumelu was over the moon after the acquisition was sealed,” he wrote.
The theorist added that the UBA boss then took to Twitter in that euphoric mood to tweet this:
“As a native of the Delta, I have always believed that the region deserves better (…).” With TNOG (his own oil company), our approach to Afrocapitalism underlines our commitment to inclusive development and shared prosperity with our host communities.”
Tony had no idea what kind of future awaited him when he sent the tweet.
“At the moment, the oil well that was producing 27,000 barrels per day is currently producing below capacity as it was when it was purchased as it is producing less than 5,000 barrels of oil today. And this is a big problem for Tony to stomach,” he wrote.
According to the article, when the valuation for the oil well OML 17 was made, it was made with the valuation that the oil well is producing 27,000 barrels per day and that it can produce more barrels if more investment in the oil well is made by Tony Elumelu’s oil company.
Iwuchukwu claimed that the fact that the OML 17 oil block was producing 27,000 barrels of oil every day was the reason for the high valuation and the reason it was sold by Shell at $1.1 billion to Tony Elumelu. Instead of the capacity of the OML 17 oil well going up as projected. it is going down and it is producing less than 5,000 barrels per day.
While explaining the reason this is so, Iwuchukwu alleged that the communities, in conjunction with security agencies and insiders in the government, are stealing the oil located in their communities.
Freelanews recalls that the same communities in Rivers State, through its leaders, pledged to strategically engage with HHOG, on the basis of mutual respect and delivery of social impact that would assuage the suffering of their people.
The Onye Ishi Agwu of Igbo Kingdom, His Majesty, Eze Dr Samuel Amaechi, who spoke on behalf of the communities, stated this when a delegation of HHOG led by its Chief Executive Officer, Osayande Igiehon paid him a courtesy visit in his palace at Edegelem in Etche Local Government Area of Rivers State.
The traditional ruler emphasised the need for sustained dialogue between the company and its host communities, pointing out that it was necessary for a Memorandum of Agreement (MoA) to be signed between the HHOG and its hosts, which according to him, will embody the terms of agreement between the entities.
So one wonders if the company couldn’t get around to sign the MoA as demanded by the host communities or HHOG is engaged in an unsavoury divide and rule tactics it was warned against. Could that be the reason Elumelu is losing money?
“These guys are stealing 22,000 barrels of oil every day from Tony Elumelu’s OML oil well and they are magnanimous and kind-hearted enough to leave only 5,000 barrels per day for Tony and his company to sell,” the theorist claimed.
“This is a profitable business for the host community where the oil well is located, and it has changed the fortunes and the destinies of the oil thieves involved in the oil stealing, but it is making Tony Elumelu poorer, hence his anger and frustration with this government.
Remember that he borrowed most of the money he used to buy OML’s 17 oil wells from Shell from foreign institutional investors and it is a dollar denominated loan.
“It has been over a year now since the dollar loan was granted to him, so he needs to pay it back with the interest on top of it. The interest on the dollar loan is accumulating, and the foreign bankers and the local lenders are knocking at his door for their money. This would not have been a problem because when the foreign dollar was granted to him, the assumption was that the prolific oil well could pay back the foreign loan, especially now that oil is selling at $100 a barrel. But this is not the case, at the moment that the community is stealing from the oil well, thereby preventing our darling Tony Elumelu from recouping his investment and paying back to the lenders the dollar loan they granted to him. Tony is in a fix and in a big state of quagmire.”
Tochukwu revealed that the company had petitioned the federal government for assistance in combating the oil thieves who steals 22,000 barrels of oil daily from his oil well.
“The frustration of what he is going through at the hands of this APC government is what influenced him to break the billionaires business men code today by calling this woeful government out,” he submitted.
If the above is the true situation of things with OML 17, then it is safe to assume that no one is immunised against the inaction of power at the centre and Nigerians must indeed take stand for radical change as the elections approach.
This article was first published on Freelanews.com
Ojelabi, the publisher of Freelanews, is an award winning and professionally trained mass communicator, who writes ruthlessly about pop culture, religion, politics and entertainment.
