Identifier
Created
Classification
Origin
03LAGOS148
2003-01-17 16:13:00
CONFIDENTIAL
Consulate Lagos
Cable title:  

NIGERIA: NOT ONLY GAS FLARES IN NIGERIA, ITS'

Tags:  ASEC ECON EPET EINV DS DSS ITA IP AF OSAC 
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C O N F I D E N T I A L SECTION 01 OF 04 LAGOS 000148 

SIPDIS


DEPT OF ENERGY FOR CAROLYN GAY


E.O. 12958: DECL: 01/08/2012
TAGS: ASEC ECON EPET EINV DS DSS ITA DS IP AF DS DSS OSAC
SUBJECT: NIGERIA: NOT ONLY GAS FLARES IN NIGERIA, ITS'
PETROLEUM HEADQUARTERS BUILDING ALSO BURNS


REF: STATE 241213Z


Classified By: CONSUL GENERAL ROBYN HINSON-JONES. REASONS 1.5 (B) AND (


D).


C O N F I D E N T I A L SECTION 01 OF 04 LAGOS 000148

SIPDIS


DEPT OF ENERGY FOR CAROLYN GAY


E.O. 12958: DECL: 01/08/2012
TAGS: ASEC ECON EPET EINV DS DSS ITA DS IP AF DS DSS OSAC
SUBJECT: NIGERIA: NOT ONLY GAS FLARES IN NIGERIA, ITS'
PETROLEUM HEADQUARTERS BUILDING ALSO BURNS


REF: STATE 241213Z


Classified By: CONSUL GENERAL ROBYN HINSON-JONES. REASONS 1.5 (B) AND (


D).



1. (C) Summary: Arson is strongly suspected in the December
24 fire that
destroyed the Nigeria National Petroleum Corporation (NNPC)
headquarters and
records. The fire followed by barely a week a newspaper
article asserting
that there is solid, extensive and documented proof that GON
officials have been
stealing much of Nigeria's oil revenue. The leader of a
previously unknown
group, the Young Democratic Movement YDM claimed
responsibility for the
fire, citing "unhappiness with the GON" as the impetus. He
and his attorney have
since been arrested. The GON has announced there will be
investigations, but
observers do not expect anyone to be charged or punished as a
result. End summary.


--------------
WHAT HAPPENED
--------------



2. (C) During the evening of December 24, fire gutted the
NNPC's Lagos
headquarters building, which was located on Ikoyi Island in
Lagos. Deputy
Police Commissioner (DPC),Haruna John (Please protect
accordingly.),
told CG and Econoff that the fire began on the eighth floor,
where the
offices of the Nigerian Petroleum Investment Management
Services
(NAPIM) were located. NAPIM manages the GON's joint ventures
with international oil companies (Shell, Mobil, Chevron,
AGIP,
Elf, and Texaco). A second fire later ignited on the second
floor of the building, where the Pipelines and Products
Marketing Company
(PPMC) was housed. PPMC sells diesel fuel, gasoline,
kerosene, aviation
kerosene, and similar products. PPMC recently began
importing fuel in
response to a shortfall on the local market.



3. (C) Observers noted the slow response of the fire
department to the fire.
The fire fighters who arrived first at the scene did so at
least an hour after
the blaze had started. According to the DPC, firemen
initially refused to

respond to the blaze until he personally dispatched policemen
to the fire
stations with orders to arrest firemen who refused to go.
When the firemen
eventually arrived on site, they lacked the proper equipment
and had to wait for
a water tanker. Hours later, a second blaze started on the
second floor, six
floors down from the first fire, and consumed the rest of the
building.




--------------
WHY HERE AND WHY NOW?
--------------

4. (U) On December 17, 2002, Barth Obi Oyibo Thompson of Abia
State placed a
three-page statement in the "Vanguard", a widely read
Lagos-based newspaper. He
began the article by establishing his ties to President
Obasanjo and Andrew Young
among others and his credentials as a petroleum industry
expert. Claiming a
commitment to Nigeria and to President Olusegun Obasanjo,
Thompson wrote
that he was compelled to expose ongoing fraud and theft of
Nigeria's
petroleum revenue through under-reporting of exports.



5. (U) Oyibo Thompson purported to have at least fifteen
years of documentary
history on Nigeria's oil exports, and stated that he had
extensive supportive
data to prove his claim of fraud. He went on that it has been
an open secret for
sometime that "an unidentified West African country" has been
under-reporting
its oil exports. According to Thompson, this fact allegedly
explains why the World
Bank reports that less than 45% of Nigeria's oil export
proceeds end up funding
Nigeria's federal budget. Oyibo Thompson concluded his
accusation by calling on
President Obasanjo, whom he considers an honorable man, to
identify the culprits
and resolve the problem.



6. (C) Comment. Post has learned from Chuka Odom, Deputy
Chief of Staff for Abia
State (Please protect accordingly),that "Barth Obi Oyibo
Thompson" is probably an alias.
Our contact has not been able to locate anyone in Abia State
who knows this
Oyibo Thompson but, he surmised that "Thompson" was a senior
NNPC official
or a disgruntled employee who definitely had access to
information. Our man
further speculated that "Thompson" probably did not work
alone, and that other
persons inside NNPC were feeding him information. The
reference to Obasanjo
as an "honorable man" may be a subtle hint to the President
to "do the right thing,"
our source said. End comment.


--------------
WHO DID IT
--------------



7. (U) Chris Nwozobia, leader of the previously unknown Youth
Democratic
Movement (YDM),has claimed responsibility for the fire. He
reportedly said he
set the building afire because of "unhappiness with the
performance of the Federal
Government". Nwozobia told the media that his group, based
in Lagos, has members
throughout the country. Nwozobia turned himself over to
State Security headquarters.
Nwozobia and his attorney, Festus Keyamo, were later arrested.



8. (C) The Deputy Police Commissioner told us on January 8
that it is unlikely
that the YDM had a direct hand in the fire. If it was
involved at all, it was
probably at the instigation of some person or group in an
effort to cover up
unethical practices at NNPC. He asserted that it would not
have been unusual
for such a group to be hired by a third party for such an
act.



9. (U) Many observers think the fire was an inside job by
persons interested in
covering their tracks following wrongdoing. The fire began
on the eighth floor,
where important documents relating to GON investments were
kept including
joint venture contracts and production sharing agreements
which may yield billions
of dollars in revenue to the GON. The projects cover
pipelines, oil field
services, supply production facilities, and field
development.



10. (U) Among the documents on this floor were those relating
to cash calls. The
GON recently paid 24 billion naira (approximately 240 million
USD) in cash call
arrears dating to the Abacha years (1994-99). The oil
companies and the GON
disagree on the exact amount of the U.S. dollars owed for
that period. The GON
says it owes the international oil companies 300 million USD,
the companies say
500 million USD.



11. (U) Documents relating to the daily sale of petroleum
products were located
on the second floor where fire also broke out. Since the
NNPC's consignees
typically obtain 30-day credit from the company, some of the
documents that
burned may have been essential to a determination of the
exact amount owed
to the NNPC. Current data on fuel imported or refined
locally was also lost.

12. (C) On January 13 Econoff met with Chuka Odom, Chief of
Staff of the
Governor of Abia State, who opined that the government will
most probably
never determine the cause of the blaze. Odom pointed out
that ninety percent
of Nigeria's foreign revenue derives from the oil sector, yet
this is the only sector
without a cabinet ministry. Odom asserted that almost any
senior GON official
now has unrestricted, and possibly undocumented, access to
NNPC records.


--------------
LIKELY OUTCOME
--------------



13. (U) Many Nigerians ad public officials have called for a
thorough
investigation of the fire. President Obasanjo, noting the
loss of vital oil
sector documents, established a panel of inquiry and the
police and fire
departments are also investigating the fire.



14. (C) The Deputy Police Commissioner said a police panel
comprising as
many as fifteen persons is investigating the matter, but he
expects no significant
findings. According to him, senior officials are not
interested in the truth.
Although asked to be a member of the investigative panel,
the DPC said he
refused to join, fearing reprisals if the investigation were
done correctly and
preferring not to be involved if it were botched. "It would
be politically and
professionally foolhardy," he said, " to uncover and expose
the perpetrator if that
person is moneyed or high-powered. This could result in death
to the person who
reveals the wrong-doing."


--------------
WHAT NOW NNPC
--------------



15. (U) The GON was not the only loser as a result of the
inferno. The
headquarters' 200 employees found themselves potentially
jobless on
Christmas Day. NNPC office workers are temporarily housed at
the
headquarters' guest quarters but some employees, such as
domestics, are
now unemployed. Because of crime in Lagos, many NNPC
employees kept
passports, school certificates, money and jewelry at their
offices and will
find it difficult to replace these items.



16. (U) An AmCit oil company executive told ConGen that the
oil companies
have copies of documents pertinent to their businesses at
their offices in Nigerian
and abroad at their corporate headquarters. NNPC should have
copies of these
documents in their Abuja offices, however, NNPC will most
likely look to the
oil companies to fill in the gaps.



17. (C) Comment. NNPC may have suffered a blow to its
reputation, which
was not high in any event. Many people suspect the
authorities will never
disclose the real cause of the fire. Lagos has a long
history of unsolved fires
gutting government properties. For example, the Defense
Building burnt in
1991 during a probe of its activities. Nigeria External
Telecommunications (NET)
building burnt twenty years ago as the result of a fire in
the accounts department.
Its reconstruction has been in progress for as many years.
Odua, an investment
group comprising five southwestern states, has lost two of
their buildings to
fires in the last seven years. The skeptics say that
NNPC will continue to
conduct business as usual, even if from temporary quarters,
and the memory
of the fire and destroyed records will fade. Long-time Lagos
residents say
the various investigating panels will produce reports, but
these will never be
released to the public. Panel members might legitimately
fear for their personal
safety if they were to delve too deeply into the
circumstances of what really
happened on Christmas eve.
HINSON-JONES