ONCE THE COUNTRY’S FAVOURITE OIL MAN DURING THE GOODLUCK JONATHAN YEARS, BENEDICT PETERS NOW NEEDS TO QUICKLY RUSTLE TOGETHER FUNDS TO PAY OFF HIS CREDITORS AND THE NIGERIAN STATE.

Trading house Aiteo is behind on its payments to its financial partners meaning its role as operator of OML 29, bought in 2014 for $2.5 billion from Shell, could be on the line.

BANKS

According to our information, on December 31, Aiteo was unable to pay an instalment on its loan from a group of Nigerian banks, which the trader still owes over $1 billion. As we revealed, the 18-month grace period Aiteo founder and chief executive officer Benedict Peters was able to negotiate with the banks in 2016 expired in June 2018. The trader was able to clear its June and September instalments but failed to pay in December. Peters, who has been based in Accra since Muhammadu Buhari‘s arrival to power in 2015, appears confident about the chances of keeping the block and being able to renegotiate new terms with the banks. The company CFO, Razak Shittu, who previously worked for United Bank for Africa (UBA), will be helping Peters handle the file.

DEPARTMENT OF PETROLEUM RESOURCES

In the interim, Aiteo could be facing a much more bothersome obstacle. As it stands, the company’s contract for OML 29 will expire on July 1. To validate a 20-year extension, Peters first needs to pay outstanding royalties, set at 18.5%, to the Nigerian state. These are regularly paid after the deadline. Once again, Peters seems certain that the Department of Petroleum Resources (DPR) will grant him an extension. The tycoon’s extensive network has far from vanished under Buhari’s administration although he no longer has the advantage of the good relations that he enjoyed with former president Goodluck Jonathan and his powerful petroleum resources minister Diezani Alison-Madueke.

CRUDE OIL THEFTS

Aiteo also continues to be hit by increasing levels of crude oil thefts, now said to be in the realm of 40% of an output of 80,000 bpd. When the situation began to reach critical levels four years ago, the business magnate did not find a solution. No significant measures were taken to secure an alternative route to the Nembe Creek Trunk Line that connects OML 29 to OML 18 and the Bonny terminal controlled by the Dutch major Shell.

The businessman did hold several meetings with specialists on what could be done to bypass this theft-prone pipeline prone.

Aiteo appears to have not been working any of the potential alternatives. Yet, even production figures are to be taken with caution as it seems there is no reliable meter installed at the wellhead.