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Oil Corruption May Threaten Angola, Nigeria, Global Witness Says

By on February 8, 2012

Nigeria and Angola, Africa’s biggest oil producers, have granted stakes in oil fields to companies that may be acting as fronts for government officials, stifling development in both countries, according to anti-corruption group Global Witness.

While increased oil output has generated billions of dollars for Angola and Nigeria, the misappropriation of public funds by corrupt officials remains one of the main causes of poverty in those countries, the London-based organization said today in an e-mailed report.

“Too often private ‘shell’ companies with opaque ownership structures are awarded lucrative concessions, with little information available as to who the beneficial owners of the company are,” Global Witness said.

Angola and Nigeria have said they’re making progress in fighting corruption and improving oil-industry transparency to attract foreign investors fleeing Europe’s debt crisis. Nigeria is Africa’s top oil producer, pumping about 2.14 million barrels a day last month, according to data compiled by Bloomberg, while Angola’s output was almost 1.79 million barrels a day.

Global Witness was one of two organizations nominated by members of the U.S. Congress for the 2003 Nobel Peace Prize for its work reporting links between armed conflict and diamonds in Africa.

Angola, which is in the final stage of a $1.4 billion loan program with the International Monetary Fund, has increased the amount of information available on the flow of crude revenue, Global Witness said. While Nigeria has also adopted measures to bolster transparency in the oil industry, both countries need to do more to fight corruption, it said.

Government Officials

The owners of Sociedade de Hidrocarbonetos de Angola (SHA), a private company that pre-qualified for an oil license tender in 2007 that was later suspended, had the same names as senior Angolan government officials, Global Witness said.

Joao Rosa Santos, a spokesman for Angolan state-owned oil company Sonangol EP, which grants oil licenses, didn’t answer three calls to his mobile phone seeking comment. SHA General Manager Marques Carreira said there was nothing illegal about his company’s shareholders or the 2007 oil license tender.

“In Angola, a member of government can be a shareholder in a private company as long as he doesn’t have an executive role in that company,” Carreira said in a phone interview from Luanda, the Angolan capital. “Global Witness should mind its own business.”

Global Witness also reported that a private Angolan company called Grupo Gema obtained a small stake in an oil license at the time when it had two shareholders with the same names as government officials. Jose Leitao, president of Grupo Gema, did not return two calls to his company in Luanda seeking comment.

‘Resource Curse’

In Nigeria, the owner of a company that bid for a share in oil contracts in 2005 may have been the senator chairing a committee that oversaw the upstream oil industry in that country, Global Witness said.

Levi Ajuonuma, a spokesman for state-owned Nigeria National Petroleum Corp., didn’t answer three phone calls seeking comment on the report.

Global Witness also cited examples of lack of transparency in the Democratic Republic of Congo’s oil and mining sectors. A “resource curse” in Angola, Nigeria and Congo has stifled development, it said.

About 70 percent of Angolans and 80 percent of Nigerians live on less than $2 a day, while one in five children in the Democratic Republic of Congo dies before its fifth birthday and more than half the population lives on less than $1.25 a day, according to Global Witness.

‘More Transparency’

“African countries with mineral resources have too long been held back from prosperity by a baleful history of collusion between corrupt and incompetent rulers,” the organization said. “More transparency would ensure a more open competition and one that is fairer to countries and their citizens.”

Angola and the Democratic Republic of Congo both placed 168th out of 182 total rankings in aGlobal Perceptions Index of countries released in December by Transparency International, the Berlin-based anti-graft watchdog. Nigeria’s ranking was 143.

3 Comments

  1. Hanacho

    February 8, 2012 at 11:22 am

    WHEN PERSONS WORK CREDIBLY , AND SINCERELY .

    THE RIGHT THING TO DO IS TO REWARD THEM FOR A WORK WELL DONE.

    BUT REWARDING THESE MEN WHO HAVE SYSTEMATICALLY ABUSED EVERY SECTOR OF NIGERIA ,

    ENRICHING THEMSELVES SELFISHLY , ABUSING OUR IMAGE INTERNATIOALLY AND DESTROYING ALL SECTORS OF NIGERIAN ECONOMY WITH CORRUPTION.

    THESE GUYS DESERVE NO MORE MONEY ,THEY OWN ALOT OF BUILDING ,PROPERTIES, AIRPLANES,SHOPPING MALLS,ESTATE IN VARIOUS STATES , PETROL STATIONS IN THE WHOLE STATES , OIL COMPANIES AND ALOT MORE I DONT KNOW .

    GIVING THEM MORE MONEY IN ADDITION TO THE STOLEN TAX PAYERS MONEY MEANS , THE PRESIDENT AND THE NATIONAL ASSEMBLY ARE MOCKING NIGERIANS AND THANKING THESE GUYS FOR A JOB WELL DONE DESTROYING NIGERIA .

    THEY SHOULD BE ASHSMED OF THEMSELVES IF THEY ARE ACTUALLY NORMAL HUMAN BEINGS .

    THIS MR PRESIDENT TO BE HONEST IS THE ONLY PERSON THAT HAVE DARED TO CORRECT THINGS EVEN THOUGH HE IS STILL NOT A SAINT .

    PLEASE OBJ,IBB,AND OTHERS ,

    HOW MUCH MONEY DO YOU GUYS ACTUALLY WANT IN LIFE ?.

    MONEY NO DEY DO FOR UNAAAAAA?

    HABA BABA THEM, MAKE UNA STOP THIS AND HELP YOUNGER ONES.

    UNA BE 75 AND ABOVE , UNA LIFE DON FINISH , MAKE UN HELP SMALLER ONES ABEG.

  2. Baba Iyabo

    February 8, 2012 at 4:18 pm

    Very Insightful Hanacho, but these guys are largely in the business of enriching their kids, concubines and every woman who gets close enough to rub their belly

  3. Hanacho

    February 9, 2012 at 6:36 am

    Look the foreign lobbist are not happy with the way , transformation is coming in Nigeria now.

    One even said in an Interview” The days of Free oil is over “.

    when i watched him say this , even though he never caled countries , i knew he was refering to Nigeria ,when he said ,Countries are setting up regulations .
    This means while Nigerians suffer in Poverty , these wicked lobbist come and front like business men for oil cartels ,fustrating every thing that will make Nigeria great .
    Obama in his speach identified the effect of Lobbist in the American society ,he even said , they will not be in his Whte house .

    Nigetians need to be careful and aks them selves .

    ” why is shell suddenly giving oando contracts for drilling .

    (1)Are there engineers no more or are they broke?
    (2)Why is shell not ready to do decent business in Nigeria?
    (3)Shell wanst to sue oando and spoil every programe ste up in the oil and gas Sector knowing fully the owner of oando.But it will fail?
    (4) Nigerians must know that the multinational companies are smarter and business oriented , they will set up virus to spoil this with excuses like , the NAss members want bribe or they are delaying there jobs with long medigations , so NASS must be smart and able to tacke issue with swipt actions .
    (5)All multinatons dont want to do decent business in Nigeria ,infact they feel ,it will soon end and business as usual will return , there local counterparst are telling them this .
    More will come when i find out more