Home News Fraudulent Nigerian Oil Firm Is “virtually broke”, Owes Millions Of Dollars –...

Fraudulent Nigerian Oil Firm Is “virtually broke”, Owes Millions Of Dollars – NNPC


Ontario Oil & Gas Limited, which was convicted for subsidy fraud, is yet to make a formal commitment to settle all its outstanding debts under a crude oil swap contract that existed between 2012 and 2014, the Nigerian National Petroleum Corporation, NNPC, said on Sunday.

The spokesperson of the NNPC, Ndu Ughamadu, disclosed this in a statement to clarify earlier information on Friday that the company had offered to pay $10 million as part of a total $184 million that three crude oil trading companies agreed to pay the NNPC after the reconciliation of transaction records.

“Contrary to information we provided earlier, which we got from our team that negotiated with the companies, Ontario Oil & Gas Limited offered nothing. In fact, the company is virtually broke,” Mr. Ughamadu said in a telephone chat  on Saturday.

“They said we (NNPC) should take its tank farm at Oghara in Delta State. But, when it was valued, it was far below what they are owing. We are still negotiating with them.”

On Friday, Mr. Ughamadu had said that Ontario had offered to pay $17 million, while Telaveras agreed to pay $10 million.

However, in his latest clarification, he said the team had corrected the figures to show that rather than Ontario, it was Telaveras, which actually agreed to make an initial tranche payment of $17.2 million within the next two weeks and $10 million in subsequent tranche payments.

Mr. Ughamadu said AITEO Energy also made a commitment to pay its debt, although no detail was given as to how much the company offered.

He said the NNPC management was committed to sanitise the record books through a painstaking reconciliation of the transactions executed during the defunct crude for product swap regime.

“We will provide the public, through the media, up-to-date information on the ongoing effort by the Corporation to recover all debts owed the company,” he said.

The spokesperson said in line with the ongoing reforms in the industry, the NNPC management was committed to the full recovery of the outstanding $184 million crude-swap product under-deliveries.

Besides, he said, the corporation would ensure that the full value of stock of its missing petrol in Capital Oil depot which currently stands at 82 million litres amounting to over N11 billion was recovered.

The NNPC commended the two companies involved in the reconciliation exercise – AITEO Energy Resources and Televaras Group of Companies – which have registered their commitment to settle all outstanding obligations.


While the NNPC seeks to recover millions of dollars from Ontario, the company and its owners were in January convicted for fraud.

Justice Lateefa Okunnu of the Lagos High Court convicted Ontario Oil and Gas, and its promoters, Walter Wagbatsoma and Adaoha Ugo-Nnadi, on an eight-count charge of fuel subsidy fraud.

The judge said the prosecution had accused Mr. Wagbatsoma, Mrs. Ugo-Nnadi, and Ontario Oil and Gas of collecting N942 million as subsidy payment instead of N602 million.

Mr. Wagbatsoma is the chairman of the company while Mrs. Ugo-Nnadi is the managing director.

The judge also said the prosecution gave evidence that the convicts discharged “a much lesser quantity” of petrol in their transaction with the government and presented a forged shore tank certificate.

“The fourth defendant defrauded the federal government of N340 million,” she said.

A prosecution witness gave evidence that, in the first transaction, Ontario Oil paid N37 million for 12 million litres of fuel in a throughput agreement with Integrated oil and Gas, but later collected subsidy for 19 million litres.

In the second transaction, the company collected subsidy for 19 million litres while they paid a throughput agreement with Obat Oil worth N28 million for 10 million litres of fuel.

“Both the first and second defendants signed the cheque for the throughput agreement,” the judge quoted the witness as saying.

Another prosecution witness, Obinna Ukonu, a store officer at Integrated Oil and Gas, gave evidence that Ontario brought in 12 million litres of fuel via a mother vessel, MT Pacific, and then a daughter vessel, MT Union Brave. The same quantity was “trucked out” by the company.

“I find that there is credible, concrete evidence that the quantity of petrol discharged was 12 million litres,” said the judge.

“Evidence by the prosecution is that the product was discharged into one tank which cannot contain more than 16.5 million litres because of an inbuilt floating roof that takes about two million litres.”

An exhibit that the judge described as “very damaging” to the defendants’ case was Exhibit D1, a calibrated report which showed that the tank in question cannot contain more than 18 million litres of fuel.


In 2012, when the convicts were first arraigned, Mr. Wagbatsoma was absent.

Rotimi Jacobs, the EFCC counsel, told the then judge, Habeeb Abiru, that he had fled to the U.S. to avoid trial.

When he eventually returned to face trial, the judge imposed a N450 million bail on him.

In July last year, despite the court holding his international passport and other travel documents, Mr. Wagbatsoma was arrested in Germany and extradited to the UK to face money laundering charges.

He is currently under house arrest in the UK.

The judge said Mr. Wagbatsoma during his testimony tried to distance himself from the running of Ontario Oil and Gas.

“The first defendant while testifying laboured to convince the court that he was not involved in the day to day running of the fourth defendant, but he signs the cheques,” Mrs. Okunnu said.

“He is of sound, literate mind. Over and over again, he informed the court he sits on the board of 27 companies. He knew what he was doing when he signed those cheques, and there is evidence that he used the money from the subsidy payment.”

For Mrs. Ugo-Nnadi, the judge described her as the “operating mind and the alter ego” of the company.

“She had full knowledge of the entire exercise.”

The judge also said she had no doubt that the company forged shore tank certificate, used for the subsidy payment.

“I find the first, second, and fourth defendants guilty of forgery. All three of them conspired as there was a meeting of minds,” she said.

The case against Mr. Fakuade, who was discharged and acquitted, was that he signed and embossed the PPPRA stamp on a forged document, the judge said.

“There is nothing that shows that he was aware of the real document that showed the actual amount of fuel discharged. It was simply gross negligence on his part.”


Before she began reading the sentencing for the crimes, the defence lawyers said they would make a “plea allocotus” – to beg the judge to temper justice with mercy.

The lawyer said Mrs. Ugo-Nnadi had been having “very serious health challenges” but has managed to be attending all the trial proceedings.

“It is our humble plea that a custodial sentence will do serious damage to her health as a result of the crowding in the prison and three or four doctors to hundreds of inmates,” the lawyer said.

He said his client is a mother of “very young children” and a prison stay would deprive her children of her “mother and father” roles.

He also said the embarrassment and loss of businesses the second defendant had suffered is enough restitution for her crime.

“The second defendant throughout the trial has suffered psychologically. She has been the butt of publications online, written press, television. She has suffered so much.”

But Mr. Jacobs said anything short of sending the convict to prison would make a mockery of the fight against corruption.

“It will send a wrong signal that custodial sentence is the preserve of the poor and the rich cannot go to jail,” said Mr. Jacobs, a senior advocate of Nigeria.

“The purpose of our criminal law is to ensure that those who contravene the law do not escape the consequences of the law.”

The judge subsequently sentenced both Mr. Wagbatsoma and Mrs. Ugo-Nnadi to 10 years in prison.

She also ordered restitution for Ontario Oil and Gas, and asked the company to refund N754 million being the amount it defrauded the Nigerian government.

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