Advocacy by the Nigeria Extractive Industries Transparency Initiative (NEITI) has brought the Beneficial Ownership of awarded oil mining leases in Nigeria under public scrutiny.
Requirement 2.5 of the 2019 EITI Standard, stipulates that by 1st of January 2020, all EITI implementing countries (which includes Nigeria) are expected to “maintain a publicly available register of the beneficial owners of the corporate entity (ies) that bid for, operate or invest in extractive assets, including the identity (ies) of their beneficial owner(s), the level of ownership and details of how ownership or control is exerted.”
This investigative report reveals the men who made the deals to secure the OML 40, operated by Elcrest Exploration and Gas Production Company and Nigeria Petroleum Development Company. It also examines the impact of their drilling operations on the environment and livelihoods in the Egbema communities in Warri North Local Government Area of Delta State since 2012.
Here in Opuama and other communities on whose mangrove terrain lies the Oil Mining Lease 40 footprints, names like Les Blair and Emeka Offor, are unknown to the communities.
Even the leaders of their host communities, some of whom were interviewed, had no clue about their beneficiary stati. They are effectively masked by the bureaucratic Nigeria Petroleum Development Company (NPDC).
But these gentlemen, Les Blair, an Irishman who worked for Addax Petroleum in Nigeria from 1998 to 2006, and Chief Emeka Offor, a politically influential Nigerian businessman, are the brains behind OML 40 since 2012, at least.
On August 31,2012, a group photograph was published to commemorate Shell’s divestment from OML 40—a lease they had operated since March 4 1964. The picture featured the following: Chairman, Elcrest Exploration and Production Company, Sir Emeka Offor, Deputy Managing Director Nigeria Agip Oil Company Ltd, Mrs. Olufunmilayo Goka, Chairman/MD SPDC, Mr. Mutiu Summonu and GMD of NNPC, Dr. Andrew Yakubu. These were helmsmen during the final take over of 45% share of OML 40 from Agip, Shell and Total at a ceremony held at the NNPC Towers in Abuja.
Behind these published photographs was the manoeuvre of the big Irishman called Leslie Blair, hugging the shadows behind his Nigerian influence merchant, Chief Emeka Offor.
One curious point is how Mutiu Sunmonu, the Shell boss who supervised the series of divestment, wound up as the CEO of one of the companies he sold on behalf of Shell. This throws a peculiar Nigerian shadow on all the divestments under his watch.
Elcrest was a marriage of convenience between Eland and Starcrest for the purpose of acquiring OML 40.
According to Les Blair, whose Eland Oil and Gas was the funding and technical partner to Starcrest in the Elcrest vehicle,
“We were a startup company with little money. All we had was our reputation. We were able to convince Shell we could do it.“
Journalist, publisher, Oil and Gas archivist, Mr Toyin Akinosho had this to say,
“Leslie Blair, whom I interviewed sometime in 2013, was the one who saw the opportunity in the spate of divestment Shell Nigeria Development Company was doing at the time. It was Les Blair’s idea that they should set up Eland Oil and Gas to take advantage of divestment by Shell. They registered the company in May, 2010, which is quoted on the Irish Stock Exchange.
“That general area, the west of the Niger Delta, had a significant attack in those days of militancy. Which is one of the reasons Shell was leaving.
“Blair was one of those interested in taking advantage of the opportunities.
“But Shell’s idea was to divest to locals. In which case, a foreign investor like Blair needed a Nigerian partner.
He had been in the Nigerian oil and gas system. He understood how business was done in Nigeria. Where the most influential, rather than the best man for the job was most likely to close the deal. So he entered a partnership with Chief Emeka Offor, an individual who, to put things nicely, knew his way around the corridors of power. He understood rent.”
Les Blair, with a Masters degree from the University of Aberdeen, is the architect of the business model under which NPDC and Elcrest, both without oil mining capacity, operate OML 40, while the resources and expertise were provided by Eland Oil and Gas with Les Blair effectively in charge until he stepped down from his role as chief executive of Eland on Monday, 8th September 2014.
With Les Blair pulling the strings in the shade and Chief Emeka Offor’s influence with the PDP government, NPDC and Elcrest initially flowed the OML 40 wells at a rate that excited the foreign stockholders.
By 2017, the unsustainable flow rate landed the joint venture in a situation where there was increasing levels of water from producing their most critical wells. They had drilled up the sweet spots of their assets and needed to drill their way out of their self-inflicted crisis.
Once again, it was to Les Blair they turned to swing things around. The finance professional came back as a strategic advisor to the company, working behind the scenes.
Could the 2019 acquisition of Eland Oil and Gas by Seplat Oil and Gas be another Les Blair move? Impossible to guess. The Irishman functions as a shadow warrior.
At this point, their political capital, drawn largely from Chief Emeka Offor had waned since APC came to power.
The issues spiraling around OML 40 are quite significant. Including the breakdown of the rig imposed on them by Napims during their drilling campaign.
And now, issues with communities which remind the Exploration and Production community of why Shell had to withdraw from the west.
Since the joint venture took over the assets in 2012, according to the President General of Egbema Youth Council, Comrade Ebidouwei Miyenpirigha,
“NPDC and Elcrest have failed to discuss, review, nor sign any memoranda of understanding with the host communities and impacted communities. But instead make promises which are not accountable.”
The exploitation of oil fields come with detrimental impacts to the people and environment for which all benefiary owners must be held accountable.
It is important to state that the people and environmental issues are critical for oil and gas companies all over the world because of the disruptive nature of bringing oil molecules to the market. So crucial that no reputable bank will give loans to an oil and gas company without a sustainability report that captures health, safety, planet and people issues.
For instance, because of the diminished quality of the Opuama and Gbetiokun Wells, the joint operators had to turn to the Ubima field. The funds required to do this properly is not captured in their budget.
In reaction to this challenge the Company has resorted to trucking about 1000 bpd of crude oil from the field through the volatile Niger Delta communities.
This is where Eland, obscure as a partner at Elcrest and masked by the NPDC, gets approval from its UK investors and regulators for an evacuation method that can not be adopted in Europe.
They are more likely blindsided. The Les Blair and Chief Emeka Offor’s contraption has traditionally depended on keeping their most sensitive investors in the dark about their poor social investments and disregard for the environment.
The Oil Industry Transparency Initiative is committed to unrevealing all beneficiary owners of the leases across the globe in keeping with global best practice because masking key players in the industry creates a fester point for corruption. It also protects these men in the shadows from living up to their corporate social responsibility and social investment.
From Sapele, a 200 horse power engine boat took 3hours and a bit to get us to Polobubo/Tsekelewu where we headed straight to the uncompleted civic centre which NPDC and its partners have been building since 2013.
Our guide, as we probed the issues causing disaffection between host and the miners, tells us, this stranded project is symbolic of how NPDC treats its own promises. Without any real commitment to deliver on them.
The Public Relations Officer of the Egbema Youth Council, Comrade Governor Ekpokeme, spoke in the same vein:
“In our last protest on the 8th of December, we were confronted with military gun boats. 8 gun boats came to stop our protest and we were unarmed. This is provocative. We were carrying placards, making legitimate demands. We wanted recognition as impacted communities, we demand for a memorandum of understanding and more socially responsible deposition from NPDC and Elcrest.
Why should they pick and choose who to recognise without regards to the impact of their business?
The Ijaw communities must be recognised as host communities in OML 40. At the moment, NPDC and Elcrest have two working platforms. One at Opuama and Gbetiokun. By next year, the Abiala field will start. The NPDC and Elcrest choose to recognise only Opuama, Tsekelewu and Polobubo communities under Opuama Flow station.
There are other communities within a kilometer of the platform. They suffer the same exposure to flaring and destruction of their source of earning a living. And health. They suffer direct impact and consequences. It is unfair to exclude them from the responsibility of providing water. When they were coming in, they promised to provide light from the platform. But all such promises were never written down and never implemented. We used to enjoy scholarships from Shell. It was just a token, but it showed they were aware we were victims of their exploitation.
NPDC and Elcrest are still paying the same amount Shell was paying decades ago. It has become meaningless to the extent of being an insult to the communities. Imagine providing, in this day and age, a scholarship worth N75, 000 per annum for 4 undergraduates. On our own, we divide the sum between two so that we can ease education for 8 undergraduates. What can less than 40 thousand provide for an undergraduate in one year? That is less than $100 per annum. That is more of an insult to the communities.
Because there is no discussion and no Memorandum of Understanding, they will just do as they like.
Imagine training a welder for three months and buying him a welding machine. To do what? NPDC won’t even employ these welders because they know the training is worthless. What can anyone learn in three months?
Imagine giving a few tricycles to people that have no roads. That is the kind of fraud going on here. Why? Because there’s no discussion and no documentation. We’re tried of people sitting down somewhere and making verbal promises they have no plans to deliver. By far the most provocative is the insinuation that we are tenants to our neighbours. Which can provoke ethnic crisis.”
The downcast but sedating weather during the noisy boat ride belies the tension brewing in the background between the aggrieved members of Egbema Youth Council, protesting on behalf of their short changed communities and NPDC, the government company which runs an oil lease like a bureaucracy.
We arrived at Tsekelewu on 16 December, 2021 and tried to engage all parties accessible until 19 December.
Text messages sent to the community representative of NPDC /Elcrest were ignored.
Several attempts to get them to respond through the phone number on their website failed. One wonders why a serious company would put an inaccessible number on their website.
The Nigerian National Petroleum Corporation had announced an explosion within the OML 40 footprint in November, 2020. The emphasis of the announcement was on the loss of profit.
There is yet to be a proper joint investigation, including community and government representatives, as required by law.
Mr Paul Toruwei of Polobubo community reports a recent spill as follows:
“The spill occurred in the early hours of Sunday, March 14, the major pipeline transporting crude oil from Opuama Flow Station in Oil Mining Lease (OML 40) ruptured, which resulted in the spillage of oil into all water bodies and swamp forest of the communities in the operational area, including Opuama, Polobubo and their bloc/satellite communities.”
Once again, there has been no joint investigation as required. And there appears to be no remediation plan in place.
Then just last week, gun men were mobilised to repress three boats bearing about forty Egbema youths carrying placards, demanding for a Global Memorandum of Understanding between them and the lease beneficiary.
It took the intervention of the chairman of Warri North Local Government Council, Mr Peter Asekutu to forestall probable fatalities.
The impression we take from the sentiments adrift here is that something significant and definitive needs to be done.
Peter Asekutu sent in a voice message to sum up his perspective:
“I still pleaded with them that this protest should not hold. We’ll find a way to talk to them.
When I came to this seat, we sent series of letters to NPDC to have a meeting with them. If not anything, this council is host to all the operations in this area. It’s just fair and normal that we work together.
We must not wait for us to have problems before we start listening to ourselves. These companies are giving us problems.”
The meeting he scheduled between the Egbema Youth Council, The Egbema Leaders of Thoughts and representatives of NPDC and Elcrest did not hold as the lease owners failed to attend.
An action, the President General of the Egbema Youth Council, Miyenpirigha, finds disrespectful and inflammatory.
“We have not been engaged about whether or not Seplat is now a benefiary in OML 40 in our region. If the rumour is true, then they should do much better than the people who sold to them. NPDC/ELCREST started operating in our territory in 2013, they promised drinkable water because the river which we used to depend on has been impacted by OML 40 activities.
They promised to give us electricity from their flow station. They promised to give viable scholarship, a civic centre, training, among other things. They promised to commit to a memoranda of understanding, especially. As we speak, they are doing everything to avoid securing our Communities recognition and a GMoU or MoU. And they are carrying on in a manner likely to promote ethnic issues between us and other ethnic groups in the area. If things continue without any change, we will have no option but to resist oppression. We are, as of now, peaceful activists representing our people. We hope that Seplat will prefer discussion.”
There are two flagship assets flaring away this lethargic December day in OML 40 which are Opuama and Gbetiokun fields.
Ogbudugbudu and Ogbinbiri Communities are under Gbetiokun field and Opuama and Polobubo Communities are under Opuama flow station.
The boat man said he was speeding because the Benin River which intercepts the OML 40 footprints had grown quite shallow over the years.
“If I slow down anyhow,” he shouted, “We fit hook.”—which means ‘get stuck’ in Pidgin English.
He could not explain his experience clearly, but a member of the Egbema Youth Council proffered a brief history of their river and its fate.
Godgift Abou had this to say: “As at 1991, Chevron dug the western bypass. Because of their well in Ikpalakpalabou. They dug the canal to make way for their rig. The communities protested on the ground that they wanted to see the environmental impact assessment. There was problem at the time but the military was deployed and the rig was brought in.
During the movement, hundreds of fishes were displaced. People were picking fishes all over the place.
On the eastern bypass, Shell was also doing good business. Destroying the ecosystem in the process.
The people had no idea what they were paid N9, 000, 000 for.
We used to live on our land. As a boy, I could easily go to the river by myself and I used to catch fishes, periwinkle with baskets.
There was nothing like hunger or laziness in our land. Even your parents cannot punish you with hunger. Because we did not need to throw a net to eat. Snails can’t run. We had them. Even a baby can catch snails, pick palm nuts. My childhood was comfortable.
Now we are waiting for ice fish to come from Sapele. Ice fish, can you imagine? Egbema people didn’t use to eat ice fish. Now we don’t have much option.
We lived in a mangrove terrain of fresh water and fresh oxygen.
Now, our river is shallow and we now have seasonal fresh water.
We now have fresh water only during the rainy season.
The sea is now bringing debris and pollution into a river. The natural life of Polobubo is gone for ever. We cannot even drink from our river. It smells. And is now coloured. We now import pure water from Sapele.
There was never a plan for the people who depended on the river and the fertility of our terrain.”
OML 40 was secured in 1965 by Shell Nigeria and shut down in 2006. Elcrest, a joint venture vehicle owned by Starcrest Energy, and Eland Oil & Gas, had applied for consent of the Minister of Petroleum for 45 per cent participating interest in OML 40 on May 24, 2011.
The operation was transferred to Elcrest in 2015. While Eland shares were acquired by Seplat in 2017.
In the last 2 years, there have been court cases between Access Bank and Seplat over loans acquired for production.
On several fronts, the Oil Mining Lease 40 is experiencing turbulence which can be traced to Blair’s original focus on profit and his foreign investors, with little concern for the people and environmental issues which they inherited from SPDC.
New comer to the mix, Seplat Petroleum must make a difference and engage the communities whose dreams lie in ruins because the world cannot get enough of the oil and gas molecules in their mangrove territory.
This investigation is supported by Policy Alert with funding from Open Society Initiative for West Africa (OSIWA).
