Matt Mossman, an emerging markets political risk specialist based in the United States, has highlighted the notion that Kola Aluko, a central figure in criminal trials for money laundering and petro-business corruption now underway in Houston, Lagos, and London along with his conspirators in the Nigerian government, may have unwittingly catalyzed what was possibly the largest ever transfer of energy assets from foreign companies to local ones, Daily Trust reports.
The relevant scheme involved Aluko allegedly brokering deals for Nigeria’s then Minister of Petroleum Resources, Diezani Alison-Madueke. Between 2010 and 2015, while Alison-Madueke held her post, several international energy companies decided to sell oil or gas fields in Nigeria. Sales of such large oil blocks often require government approval. One of the charges against Alison-Madueke and Aluko is that the former allegedly used her government power to steer the sale of these fields to Nigerian interests that bribed her, while Aluko (and others) facilitated the graft.
As a result of the funneling of major oil blocks to local energy firms, a growing group of local Nigerian oil-and-gas entrepreneurs now control 18.9% of oil production and 18.2% of gas output, according to state statistics. This is unprecedented as in most countries, oil-and-gas production is the job of global giants such as Shell and Exxon. Small, local, private energy companies are so rare that finding data to make a precise comparison to the current prevalence of them in Nigeria may not be possible.
Nigeria is unique among the 20 countries producing over one million barrels a day, in that it has such a significant proportion of its output controlled by small, local companies. This is worth emphasizing because, as is frequently noted, the shift to local control is an elusive goal in most cash-poor, resource-rich economies. Other such states have begun looking to Nigeria as an example by putting local-content quotas into their resource-sector laws and holding bidding rounds to transfer smaller, marginal fields to local companies.