InfoAnda - Insight: Nigeria oil corruption highlighted by audits |

Pakistanis angry over detentions in Times Sq. case
Monday, May 24, 2010
ISLAMABAD – Relatives of three men detained by Pakistan for alleged links to the suspect in the attempted Times Square bombing say the men are innocent.
They

Taiwan denies boycotting Australian film festival
Thursday, August 6, 2009

AFP - Thursday, August 6TAIPEI (AFP) - - Taiwan's Beijing-friendly government on Wednesday denied boycotting an Australian film festival amid a row over the e

Merkel's support dips, regional ally resigns International
Thursday, September 3, 2009

By Sarah Marsh and Noah Barkin

BERLIN (Reuters) - Chancellor Angela Merkel suffered a double blow on Thursday as a senior party ally in east German

Minister seeks closure of anti-Berlusconi websites
Wednesday, December 16, 2009
ROME (AFP) - – The Italian government moved Tuesday to close down Internet sites encouraging further violence against Prime Minister Silvio Berlusconi, who

Asian markets mixed after Wall Street rally
Wednesday, March 18, 2009

By ELAINE KURTENBACH,AP Business Writer AP - Wednesday, March 18SHANGHAI - Asia's stock market rally seemed to be running out of steam Wednesday, despite an

British economic growth data revised upwards | 26 February 2010
Thailand revokes Russian conductor Pletnev's visa | 22 July 2010
Intel says hackers attacked around time Google hit | | 24 February 2010

Activision profit tops Street, shares rise | | 5 November 2010

Forum Views () Forum Replies ()

Read more with google mobile : Insight: Nigeria oil corruption highlighted by audits |

Edition: U.S. Africa Arabic Argentina Brazil Canada China France Germany India Italy Japan Latin America Mexico Russia Spain United Kingdom Home Business Business Home Economy Technology Media Small Business Legal Deals Earnings Social Pulse Business Video The Freeland File Markets Markets Home U.S. Markets European Markets Asian Markets Global Market Data Indices M&A Stocks Bonds Currencies Commodities Futures Funds peHUB World World Home U.S. Brazil China Euro Zone Japan Mexico Russia India Insight World Video Reuters Investigates Decoder Politics Politics Home Election 2012 Issues 2012 Candidates 2012 Tales from the Trail Political Punchlines Supreme Court Politics Video Tech Technology Home MediaFile Science Tech Video Tech Tonic Social Pulse Opinion Opinion Home Chrystia Freeland John Lloyd Felix Salmon Jack Shafer David Rohde Bernd Debusmann Nader Mousavizadeh Lucy P. Marcus David Cay Johnston Bethany McLean Edward Hadas Hugo Dixon Ian Bremmer Mohamed El-Erian Lawrence Summers Susan Glasser The Great Debate Steven Brill Jack & Suzy Welch Breakingviews Equities Credit Private Equity M&A Macro & Markets Politics Breakingviews Video Money Money Home Tax Break Global Investing MuniLand Unstructured Finance Linda Stern Mark Miller John Wasik James Saft Analyst Research Alerts Watchlist Portfolio Stock Screener Fund Screener Personal Finance Video Money Clip Investing 201 Life Health Sports Arts Faithworld Business Traveler Entertainment Oddly Enough Lifestyle Video Pictures Pictures Home Reuters Photographers Full Focus Video Reuters TV Reuters News Article Comments (3) Slideshow Full Focus Editor's choice Our best photos from the last 24 hours. Full Article Images of February Follow Reuters Facebook Twitter RSS YouTube Read Strong solar storm heading for Earth 5:57am EST U.S. may sue Apple, publishers on e-book pricing: report 10:15am EST Apple lifts lid on 4G iPad, keeps prices | 07 Mar 2012 California man arrested in killing of girlfriend with cannon 06 Mar 2012 Greece optimistic as bond swap deadline nears 11:06am EST Discussed 157 Obama warns against ”loose talk” of war on Iran 104 Three Occupy Oakland protesters charged with hate crimes 77 Obama mulls giving Moscow data on missile defense Watched Concept cars shine in Geneva Wed, Mar 7 2012 U.S. Navy kicks off rail gun tests with a bang Tue, Feb 28 2012 Apple unveils newest iPad Wed, Mar 7 2012 Insight: Nigeria oil corruption highlighted by audits Tweet Share this Email Print Related News UPDATE 2-Chevron says fire now out at Nigeria gas well Tue, Mar 6 2012 Oil ends February higher on upbeat Fed report Wed, Feb 29 2012 Clinton: Japan, EU working to comply with Iran sanctions Wed, Feb 29 2012 Special Report: A prescription for corruption Tue, Feb 28 2012 Oil falls after recent surge despite supply fear Mon, Feb 27 2012 Analysis & Opinion Essential tax and accounting reading: Taxing the rich, Germany and the financial transactions tax, global tax dodges, and more ECB cash palliates crisis but drives up oil price Related Topics World » Special Reports » 1 of 3. A protester shouts slogans on the second day of a protest against a removal of fuel subsidies in Lagos in this January 10, 2012 file photo. Credit: Reuters/Akintunde Akinleye/Files By Joe Brock and Tim Cocks ABUJA/LAGOS | Thu Mar 8, 2012 5:28am EST ABUJA/LAGOS (Reuters) - Jolted by a public outcry since the start of the year, Nigeria's government has announced a series of measures to address oil industry corruption in the world's eighth biggest producer. It is an issue that may come to define Goodluck Jonathan's presidency. An important supplier to the United States because of the oil's high gasoline content, Nigeria has attracted billions of dollars of investments from the world's top oil companies. Yet poverty in Africa's second biggest economy is rising, with almost 100 million people living on less than $1 a day, data released last month shows. The percentage of Nigerians living in absolute poverty - those who can afford only the bare essentials of food, shelter and clothing - has risen to around 60 percent. Two recent audits of the oil industry reviewed by Reuters show billions of dollars in irregularities despite years of government promises to clean it up. In January hundreds of thousands of Nigerians took part in the biggest protests in the history of Africa's most populous nation. Sparked by a hike in state-subsidized petrol prices, the protests were fuelled by anger at the graft that has for decades channeled oil wealth into the pockets of a minority. Corruption has left oil-dependent Nigeria unable to cater for its basic health, infrastructure or education needs. Goodluck Jonathan won a presidential election last year that observers said was Nigeria's cleanest since the end of military rule in 1999. Many voters had hopes that he would root out corruption. Amongst the actions announced by Oil Minister Diezani Allison-Madueke in January was the hiring of two accounting firms to audit the industry. But even as the minister was announcing the new measures, auditors working for the Nigeria Extractive Industries Transparency Initiative (NEITI) - a government-funded watchdog - were winding up another investigation into the oil industry. That study, examining the period 2006-2008, was sent to the relevant government authorities at the end of January. A copy reviewed by Reuters is likely to add to the pressure on Jonathan for reform. It lists discrepancies and shows billions of dollars missing from Nigeria's oil revenues. THE MISSING BILLIONS Getting a clear picture of how much money Nigeria has lost to corruption over the years is almost impossible. The system is hemorrhaging cash in so many places that accountants often struggle to make sense of it all. The state oil firm, Nigerian National Petroleum Corporation (NNPC), does not measure its output. The government estimates that average output is 2 million to 2.6 million barrels of oil a day, making Nigeria Africa's biggest producer. "Right now, no one can tell you exactly how much of our crude is extracted from our soil," said Orji Ogbonnaya Orji, who sits on the board of directors of NEITI. "We depend on records from the oil companies. That clearly has to change." The NEITI audit shows some startling gaps: $540 million missing from $1.675 billion in signature bonuses - these are advance payments to develop fields, a standard producer country demand. Then there's 3.1 million barrels of oil missing from NNPC declarations about its joint ventures compared with the figures released by NNPC's international partners. That equates to 0.25 percent of the output. NNPC also received $3.789 billion in dividends from Nigeria LNG, a liquefied natural gas venture over the 2006-2008 period, but there is no record of those dividends being paid into the federal accounts. An NNPC spokesman did not respond to requests to explain the irregularities listed in the report in detail. The firm denies malpractice. When asked about corruption last month, NNPC managing director Austin Oniwon replied that the issue was overblown. "Corruption in NNPC is in the imagination of some people," he said. The NEITI report says foreign oil majors may have underpaid royalties "of $2.33 billion arising from subjective interpretation of volume, pricing," and grading variables. "We are questioning the basis of those calculations," Orji explained. "They are not calculated on the basis of empirical fact. And there is connivance by officials." Foreign firms also seemed to have underpaid petroleum profit tax by over $1 billion, NEITI said. The report recommended a review of the tax returns of Chevron and Exxon Mobil. Exxon officials were not immediately available to comment. A Chevron spokesman said the firm "complies with all laws and regulations in the locations where we operate, as a matter of long-standing policy Chevron does not release specific financial details." The NEITI audit has only just been delivered to the government. Another audit, this time by KPMG and focusing on the state oil firm, was delivered to the oil ministry in Nov 2010. The government has not published it. A copy reviewed by Reuters shows similar practices. It notes that NNPC invoices for domestic crude in U.S. dollars but pays the government in naira and that "exchange rates used by NNPC were lower than (those) ... published by the CBN (central bank)", causing a loss of 86.2 billion naira ($550 million) to the treasury from 2007 to 2009. KPMG also said fuel subsidy claims were based on unverified declarations of fuel imported or refined rather than actual retail sales at pump stations. Analysts say this highlights a scam: fuel import ships - operated by private importers, not just the NNPC - are declared full in order to claim subsidies but are really half empty, having sold to Nigeria's neighbors where prices are higher. "Some of the issues that were revealed were shocking," the head of the House of Representatives fuel subsidy probe, Farouk Lawan, said. He added government officials had understated NNPC payments by billions of naira. Daily consumption of petrol is 35 million liters, yet importers were being paid for 59 million liters a day. "That means subsidy is being paid on 24 million liters but is not being consumed by Nigerians," he said. "Either those products were not brought in or they were brought in and diverted or ... smuggled out. Most likely a combination." Asked about the KPMG report in January, President Jonathan pointed out that he had set the investigation in motion. "If there are queries, we further those queries to them (the NNPC) to answer. If people have been found to be corrupt, the law will take its own course." INVESTIGATION, INACTION At Nigeria's annual oil and gas conference in Abuja at the end of last month, oil men traded business cards with Nigerian politicians. The talk was all optimism, offshore oil platforms and new pipeline technologies. "Corruption is on everybody's minds but nobody's lips," said Bismarck Rewane of Lagos consultancy Financial Derivatives. Asked at the conference about corruption, Oil Minister Allison-Madueke said the government was "mindful of the challenges still within the sector ... financial leakages and other deep-rooted inefficiencies," and that "there is undoubtedly a need for change." Nkem Onyikawa, managing partner of one of the firms involved in a new oil audit, Sada, Idris and Co. said the work would be finished within nine months. Allison-Madueke has also set up three committees to look into bottlenecks to oil reform, including one to hurry up an oil bill seen as vital to transparency that has been stuck for years. "Several panels and committees have been set up to reform the petroleum industry, and over the years many of these efforts have been stalled," Allison-Madueke said in a recent speech. Graft has not deterred oil firms from doing business in Nigeria. Last month Exxon signed a 20-year license on a field that makes up nearly a quarter of Nigeria's output. A foreign oil executive summed it up thus: "Ideally what you want is a clean and transparent oil business, but failing that you want a business where you know the rules and how to play by them." Last week James Ibori, the former governor of an oil-producing state, pleaded guilty in a London court to corruption, a development many Nigerians welcomed but which highlighted something: No such successful prosecution of a senior figure has happened on home soil. ($1 = 157.7300 naira) (Additional reporting by Camillus Eboh in Abuja; Writing by Tim Cocks; editing by Jane Baird and Janet McBride) (This story was corrected to remove reference to Bayelsa state in final paragraph) World Special Reports Related Quotes and News Company Price Related News Tweet this Link this Share this Digg this Email Reprints We welcome comments that advance the story through relevant opinion, anecdotes, links and data. If you see a comment that you believe is irrelevant or inappropriate, you can flag it to our editors by using the report abuse links. Views expressed in the comments do not represent those of Reuters. For more information on our comment policy, see http://blogs.reuters.com/fulldisclosure/2010/09/27/toward-a-more-thoughtful-conversation-on-stories/ Comments (3) PhreeB4God wrote: Edition: U.S. Africa Arabic Argentina Brazil Canada China France Germany India Italy Japan Latin America Mexico Russia Spain United Kingdom Back to top Reuters.com Business Markets World Politics Technology Opinion Money Pictures Videos Site Index Legal Bankruptcy Law California Legal New York Legal Securities Law Support & Contact Support Corrections Advertise With Us Connect with Reuters Twitter Facebook LinkedIn RSS Podcast Newsletters Mobile About Privacy Policy Terms of Use Copyright Our Flagship financial information platform incorporating Reuters Insider An ultra-low latency infrastructure for electronic trading and data distribution A connected approach to governance, risk and compliance Our next generation legal research platform Our global tax workstation Thomsonreuters.com About Thomson Reuters Investor Relations Careers Contact Us Thomson Reuters is the world's largest international multimedia news agency, providing investing news, world news, business news, technology news, headline news, small business news, news alerts, personal finance, stock market, and mutual funds information available on Reuters.com, video, mobile, and interactive television platforms. Thomson Reuters journalists are subject to an Editorial Handbook which requires fair presentation and disclosure of relevant interests. NYSE and AMEX quotes delayed by at least 20 minutes. Nasdaq delayed by at least 15 minutes. For a complete list of exchanges and delays, please click here.

Other News on Thursday, 8 March 2012
EU moves to help free Italian sailors held in India |
French implant boss jailed after missing bail payments |
War crimes prosecutor demands 28 years for Serb nationalist |
Apple lifts lid on 4G iPad, keeps prices |
John Carter filmmaker faces risky debut with a smile |
Jessica Simpson strikes Demi-like nude pose for Elle |
Harvey Weinstein passes on movie pitch from Obama |
Jersey Shore star Snooki is engaged, pregnant |
Annan urges end to Syria violence |
Israel asks U.S. for arms that could aid Iran strike |
U.S. probes allegations Afghan Air Force involved in drug running |
China parliament unveils dissident detention powers |
Analysis: Amid Iran war of words, Palestinians are forgotten |
Bin Laden widows charged for illegal stay in Pakistan |
Insight: Nigeria oil corruption highlighted by audits |
Venezuelan journalist in eye of Chavez cancer storm |
U.S. envoy says assured North Korea aid will go where needed |
Austrian MP disputes charge of flawed Russia vote |
Anonymous hurt by arrests but hard to kill |
Apple to stay ahead of rivals with faster iPad: analysts |
Apple unveils 4G iPad |
U.S. may sue Apple, publishers on e-book pricing: report |
Italian supercar designers turn the page |
Former top Microsoft exec says world is over the PC |
U.S. tech groups alarmed by India purchasing plan |
PayPal sparks furor over limits on obscene e-books |
Senators to hear pitch for tougher cyber security |
OSCE urges Tajiks to end shutdown of Facebook, sites |
Private funeral for Davy Jones held in Florida |
''All-American Muslim'' TV show ends as viewership slumps |
Label scents global success with Japan band Perfume |
Greece at new risk of being pushed off euro
Bodies of missing Tenn. mom, Jo Ann Bain, and daughter found
Female Breasts Are Bigger Than Ever
AMD Trinity Accelerated Processing Units Now in Volume Production
The Avengers (2012 film), made the second biggest opening- and single-day gross of all-time
AMD to Start Production of piledriver
Ivy Bridge Quad-Core, Four-Thread Desktop CPUs
Islamists Protest Lady Gaga's Concert in Indonesia
Japan Successfully Broadcasts an 8K Signal Over the Air
ECB boosts loans to 1 trillion Euro to stop credit crunch
Egypt : Mohammed Morsi won with 52 percent
What do you call 100,000 Frenchmen with their hands up
AMD Launches AMD Embedded R-Series APU Platform
Fed Should not Ignore Emerging Market Crisis
Fed casts shadow over India, emerging markets
Why are Chinese tourists so rude? A few insights

USD EUR - 1 year graph		BlogMeter 1.01