Lawyers Storm Finance Ministry, Demand Probe into Mele Kyari’s $4B Refineries Spending, Others

A group of lawyers submitted a petition to the Minister of Finance today, demanding a judicial commission of inquiry into the tenure of Mele Kolo Kyari, the former Group Chief Executive Officer of the Nigerian National Petroleum Corporation Limited (NNPCL).

The lawyers under the aegis of the Guardian of Democracy And Rule Of Law alleged that Kyari’s leadership was marked by monumental corruption, tax evasion, abuse of office, and misappropriation of public funds, particularly in the spending of over $4 billion on refineries repairs.

Led by Barrister Benjamin Theophilus, they claimed that the amount spent on refineries repairs was inflated, citing a proposal by a consortium of private sector firms to repair the three refineries for about $1 billion.

The petition highlighted several areas of concern, including fraudulent allocation of crude oil proceeds, misappropriation of funds in the AKK Gas Pipeline Project, fuel subsidy fraud, and value review for NNPCL’s crude-backed loans.

“Mele Kyari is alleged to have collaborated with certain consultants and contractors involved in the refineries rehabilitation projects to conceal the actual cost of the contracts and evade taxes due to the Federal Government,” the petition stated.

“Seven years ago, there was a proposal by a consortium of private sector firms to repair the 3 refineries, with a total capacity of 445 kbpd (thousand barrels per day) for about $1 billion.

“NNPCL under Mele Kyari has expended $1.5 billion on the Port Harcourt Refinery, $1.5 billion on the Warri Refinery and $1 billion on the Kaduna Refinery bringing the total of what Kyari spent on the refineries to more than $4 billion as opposed to the $1 billion that the consortium has requested for all the refineries.

“Even after expending these inflated sums, the refineries are unable to produce gasoline without using large quantities of chemicals from Indorama. This is a monumental project cost inflation as about $500 million is sufficient to build a brand new simple 600 kbpd refinery that will operate at a better efficiency.

“There is credible information that crude oil allocations were diverted, and financial transactions were carried out under the guise of ‘pipeline security’ at a suspicious rate of 80,000 barrels per day, with no transparent process or accountability mechanism.

“The AKK Pipeline Project, initially valued at $5 billion has been riddled with irregularities in the award and execution of contracts. Despite several budgetary provisions and foreign financing arrangements, there is little physical progress or transparency in fund utilization.

“There have been repeated allegations of fraud tied to the payment of fuel subsidy. It is instructive to note that while the rest of the world witnessed a decline in fuel consumption in 2020 due to COVID, NNPCL increased its imports of petroleum products during the same period.

“Under Mele Kyari, NNPCL took various crude-backed loans which hit $21.565 billion since 2019. Aside from mortgaging future production, the structure of these loans disadvantage Nigeria as upside from trading Nigeria’s crude in the international market was ceded to traders. “

The lawyers demanded a thorough investigation into Kyari’s tenure and the recovery of public funds if found to have been misappropriated.

They also called for collaboration with the Federal Inland Revenue Service (FIRS) to probe suspected tax evasion and fraudulent declarations.

The lawyers emphasized that the demand for a Judicial Commission of Inquiry into the affairs of the NNPCL in the last five years is non-negotiable, and expected the Commission to be populated by Nigerians of impeccable character led by former justices of the Supreme Court.

The petition was submitted after a protest by the group of lawyers, who are demanding justice and transparency in the management of Nigeria’s petroleum sector.