The Nigerian National Petroleum Corporation (NNPC) yesterday rose in defence of the beleaguered Minister of Petroleum Resources, Mrs. Diezani Alison-Madueke, who the House of Representatives had ordered its Committee on Public Accounts to probe for allegedly spending N10 billion on chartering jet over a two-year period.
The minister was accused of flying with the chartered Bombardier Challenger 850 aircraft, along with her family.
The state-run oil corporation denied the allegation, saying it did not hire the jet for the minister’s exclusive use or for the use of her family.
But despite the denial, THISDAY has gathered that VistaJet, the Swiss-based operator of the Bombardier Challenger 850, has hurriedly recalled the aircraft, following the decision by the House to probe the transaction.
Reacting to the allegation that it was responsible for settling the bills for the chartered jet, the oil corporation in a statement by its acting Group General Manager, Group Public Affairs Division, Dr. Omar Farouk Ibrahim, said contrary to the information being peddled in some quarters, Alison-Madueke did not charter any aircraft for her personal use or for the use of her family.
It however added that in line with the law establishing the corporation, NNPC in the discharge of its statutory and commercial functions engages third parties to provide services outside of its core business.
According to it, the practice is common and acceptable in the local and international business environment in which it operates.
It said: â€œThere is nothing prohibiting NNPC from owning or chartering an aircraft. On the contrary, by the enabling legislation, NNPC is empowered to â€˜hold, manage and alienate moveable and immovable property and enter into contracts or partnerships with any company, form or persons which in the opinion of the corporation will facilitate the discharge of the said duties under this Actâ€™.â€
It added: â€œOperations in the oil and gas sector are time sensitive and often require prompt attention, which cannot be achieved using regular scheduled flights. It is standard practice for large oil and gas corporations such as NNPC to make use of the most efficient means of transportation to ensure the effective and efficient coverage of the vast scope of critical oil and gas assets under their purview.
â€œNNPC has always availed itself of the use of owned or chartered aircraft for the purpose of its business, which includes the transportation of its top functionaries.
â€œIn this regard, it is pertinent to note that the international oil companies operating in joint ventures with NNPC, regularly charter aircraft as dictated by the exigencies of their business. Indeed some have moved from owning their own aircraft to using the charter opinion. Other national oil companies, such as Sonangol of Angola, have also chosen the charter option.
â€œThe advantages of the charter option include zero capital and maintenance costs resulting in a lower financial outlay and thus an improved cash flow.â€
THISDAY however learnt yesterday that upon hearing that the House had ordered a probe into the transaction, VistaJet hurriedly recalled the aircraft.
The Challenger 850 jet, which is registered in Austria and derived from the Bombardier CRJ200 airliner, has a seating capacity for 15 to 19 passengers and a range of nine hours flight time for continental or international travel.
It was gathered that VistaJet recalled the aircraft last Thursday immediately after the House, in a resolution, mandated its Committee on Public Accounts to probe the allegation that the minister had expended N10 billion on chartering the private jet over a two-year period.
More details on the Challenger 850 purportedly used by the minister showed that she had been chartering the aircraft provided by VistaJet, which was brought into Nigeria by a major player in the oil and gas sector, Mr. Kola Aluko, for at least three years before her mode of travel and the attendant cost to the public treasury were brought to the notice of the parliament.
VistaJet had in 2010 partnered Aluko, a close associate of Alison-Madueke, and appointed him into its Advisory Board to drive its expansion into West Africa, with the regional office based in Lagos.
Aluko, whose company, Septa Energy Limited, alongside Atlantic Energy Drilling Concepts, entered into a Strategic Alliance Agreement with the Nigerian Petroleum Development Company (NPDC), the upstream subsidiary of NNPC, to finance oil blocks operated by NPDC, was a long-term customer of VistaJet, before he became the luxury jet operatorâ€™s partner.
However, an aviation sector operator informed THISDAY that VistaJet Holding SA, a Swiss airline holding company founded in 2004 by Thomas Flohr, which specialises in providing chartered services, leasing and sale of executive aircraft to the super rich, was operating illegally in Nigeria, as it was not registered in the country and did not pay taxes.
But despite the â€œillegalityâ€ of its operations in the country, many top government officials and businessmen patronised its executive jets for their trips.
By his appointment, Aluko was supposed to have expanded VistaJetâ€™s operations in Nigeria, in particular, and the rest of West Africa in general by getting clients to lease and charter planes.
However, the proliferation of private jets in Nigeria did not make the business lucrative for VistaJet to continue with Aluko, leading to a review of his partnership with the company, which appointed Cavertons Helicopters Limited as its Nigerian partner.
Another source familiar with Alison-Madueke’s patronage of VistaJetâ€™s aircraft said: â€œThis Challenger 850 Bombardier jet chartered by the minister was usually parked at the Evergreen Hangar, belonging to former Director General of Nigerian Civil Aviation Authority (NCAA), Dr. Harold Demuren, at the Murtala Muhammed International Airport.â€
He confided in THISDAY that Demuren owned and operated this hangar even while he was in NCAA before President Goodluck Jonathan removed him in March 2013.
Giving an estimate of how much it costs to charter the aircraft, he said parking fees alone cost $30,000 a month for an aircraft the size of the Challenger 850.
Due to its long-range capability for continental flights, which could last up to nine hours, the jet also has to maintain at least four pilots and a minimum of eight air hostesses.
The source explained that each of the pilots would be paid a minimum of $15,000 per month while the cost of a flight is an estimated $15,000 per hour.
Shedding more light on why VistaJet had to hurriedly recall the aircraft upon hearing of the decision by the House to probe Alison-Maduekeâ€™s alleged patronage, he said the company had been operating illegally in Nigeria because it was not registered in the country, yet government officials patronised it.
He added that VistaJet might have been concerned that the probe could lead to its indictment by the House and possible grounding of its aircraft in Nigeria.
He disclosed that another private charter business in Nigeria is Hangar 8, registered in the United Kingdom, which was occasionally patronised by the suspended Governor of Central Bank of Nigeria (CBN), Mallam Sanusi Lamido Sanusi.
Speaking further on how the minister allegedly resorted to chartering jets, he said she did so because NNPC planes that she could have been using for her trips had been grounded.
THISDAY had exclusively reported last Friday that the minister had resorted to chartered flights for her journeys because of the poor state of the NNPC fleet.
An NNPC official had explained that traditionally, all petroleum ministers had always flown with planes belonging to the oil corporation, but the incumbent minister had been forced to charter private aircraft because one of the planes operated by NNPC had aged considerably, while the other, a newer aircraft, was involved in an air incident recently and had not been repaired.
According to the source, the ministerâ€™s chartered flights are paid for by NNPC but the bill grew quite astronomical when she started using the jet for her international trips as well as for the private use of her family members.
He recalled that a Nigerian newspaper, over a year ago, had broken the story on the minister’s preference for chartering executive airplanes for her trips, which were paid for by oil industry operators and NNPC.
The newspaper, however, elected not to disclose the identity of the minister in its story, even though those in the industry knew who the paper was referring to.
It was learnt that when the report was published, Alison-Madueke was concerned and stopped chartering planes for the first and final legs of her international flights.
Instead, she resorted to flying with commercial airlines such as British Airways and Lufthansa when she was departing or entering Nigerian airports.
However, once she was abroad, the Challenger 850, which would have flown ahead of her, would be at her disposal for other stopovers overseas.
Meanwhile, President Goodluck Jonathan yesterday admitted that there had been irregularities in the accounting system of NNPC.
He however assured Nigerians that his administration would resolve problems and challenges that had led many to believe that the country is not abreast of the exact amount of oil it pumps into the market on a daily basis.
The president spoke in Amsterdam, Netherlands, when he engaged the Nigerian community in the Dutch city in an interactive session.
Jonathan, who also confirmed the $10.8 billion that had not been reconciled by NNPC, which was discovered by the Ministry of Finance, said this was what led to the order for a forensic audit of the corporation.
The president noted that the non-remittance of $49.8 billion as alleged by Sanusi, could not have happened during the period Sanusi brought it up.
He said the same Sanusi later contradicted himself saying the amount was no longer $49.8 billion but $12 billion, until the latest figure of $20 billion went viral following his testimony at the Senate.
Responding, the Nigerian community expressed its support for Jonathan over Sanusi’s suspension and asked the president to sack him.
Asked on Boko Haramâ€™s violent activities, the president assured his audience that the country would overcome the challenges of insurgency, kidnapping and piracy, adding that the developments were alien to the nation and required understandings to tackle the menace.
While also admitting that Nigeria previously had no security architecture to deal with the situation, the president however informed the audience that the menace would be effectively tackled.
On the Petroleum Industry Bill (PIB), Jonathan told the Nigerian community that he had been assured by the legislature that the seventh National Assembly would be able to complete work on it and pass it.
According to him, the National Assembly would continue with the PIB as soon as work has been completed on the 2014 budget.
He expressed confidence that there was great hope for a better Nigeria despite its challenges.