The accumulation of over $62billion in unpaid arrears of revenue due to the Federation plus interest under the deep offshore production sharing contracts and the subsequent steps taken to recover the amount from the oil producing companies have sparked national interest and media debate.
What is apparent from the imbroglio was the fact that such Nigerian revenue, assets and resources were left at the mercy of winds and tides with little or no efforts in the past to recover the huge amounts.
It is interesting to note that since 19th January, 2017, Trobell International Nigeria Limited had identified the accrued and unpaid revenue arising from the profit sharing contracts as a huge recovery prospect and sent a proposal to the Federal Ministry of Finance applying to be engaged as recovery agent to recover the accrued revenue.
Trobell’s motives for sending the proposal were purely altruistic, aimed at serving Nigeria’s interest by helping to recover huge amounts of revenue due to the Federation. This was against the backdrop that the agencies of government responsible for the recovery of these revenues accruing since 2003 had for some unknown reasons either ignored the matter or chose not to act on it.
Moreover, Trobell was convinced that with Muhammadu Buhari in office as Nigeria’s President and Minister of Petroleum Resources, there was no better leader with the courage and conviction to confront the big oil companies and recover all the monies due to the Federation especially at a time when the Nigerian economy was in a very bad shape due to recession and government finances were in dire straits with no alternatives but to go borrowing through floating costly bonds.
Despite the glaring prospect of recovery of additional revenue to the Government of the Federation and for reasons unknown, the firm’s proposal was neither processed by the Federal Ministry of Finance nor forwarded to the Attorney-General of the Federation who as the custodian of public interest, has been vested with constitutional responsibilities for further action.
One year after Trobell’s proposal to the Minister of Finance, and precisely on 19th January, 2018, the firm forwarded same proposal to the office of the Attorney-General of the Federation requesting to be engaged as agents to recover the diverted proceeds of the Government of Nigeria due from the share of profit oil under the various production sharing contracts made pursuant to Section 16(1) of the Deep Offshore and Inland Basin Production Sharing Contracts Act Cap D3 Laws of the Federation of Nigeria 2004.
These two letters written by Trobell to both the Federal Ministries of Finance and Justice, wherein the firm had reported how the Government of the Federation had been losing billions of dollars as a result of certain infractions arising from the negligent non-compliance with the provisions of S. 16 (1) of the Deep Offshore and Inland Basin Production Sharing Contracts Act by the contracting parties. This conforms with the procedure of engagement of recovery agents in the office of the Attorney General of the Federation when whistleblowers report cases of fraudulent activity or similar issues of contravention of the law that are detrimental to the Government of the Federation. Engagement of recovery agent is triggered by such disclosures in deserving cases.
Worthy of note also is the fact that in April 2017, the Attorneys General of three oil-producing States of Rivers, Bayelsa and Akwa Ibom (as Plaintiffs) brought an action against the Federal Government of Nigeria and the Attorney General of the Federation, the implication of which was that the Attorney General of the Federation being the Chief Law Officer of the country was sued by the three Attorneys General representing their individual States.
The Plaintiffs sought two declarations and a consequential order compelling the 2nd defendant-AGF, Abubakar Malami, SAN to recover and pay immediately all outstanding statutory allocation due to the Plaintiffs from August 2003.
Having established a valid claim, in November 2017, the parties applied for amicable settlement, which was granted by the Supreme Court. In October 2018, the Supreme Court gave ruling. One of the classical orders of the Supreme Court in the ruling is that the HAGF should establish a body, which will be the vehicle for the recovery. Hence, the major flanks of the settlement reached by the parties at the Supreme Court were, constituting a body to be set up by the HAGF with representation from the three oil producing States and the Plaintiff’s solicitors to jointly pursue recovery of the amounts in contention, and that no liability on the part of the Federal Government to pay a Kobo to the plaintiffs until recoveries are made. Meaning that liability of the Federal Government is contingent on recovery.
On the strength of the Supreme Court Judgment, the Attorney General of the Federation constituted a body with the Attorneys General of Rivers, Bayelsa and Akwa Ibom States, Solicitors to the Plaintiffs, representatives of the office of the HAGF as members and Trobell as the Chair and Lead Consultant. Trobell then engaged the services of a consortium of experts including Legal, Accounting, Engineering and Oil and Gas industry experts for the purpose of the recovery. These consortium of experts have worked assiduously to establish the facts and figures. These experts have also been engaging with the oil producing companies in the Federal High Court in Lagos and Abuja.
The question therefore is more or less about foregoing a recovery of $62bn so as to avoid the payment of 5% professional fee which at any rate is contingent on recovery. An engagement that is more or less “ no success no fee” in its implication and imports. Clear case of a penny wise pound foolish playing out in the circumstances.
It is obvious that the judgment debtors are doing their best to distract attention of the general public by dwelling on the 5% professional fee. But would the resistance of paying for the 5% be the hindrance to secure recovery of the $62bn?