Femi Falana, Nigeria’s Senior Advocate, said that former President Umaru Yar’Adua reversed the sale of the Port Harcourt refinery to a consortium led by business billionaire Aliko Dangote because the deal did not follow a legal process.
In a recent interview with Channels Television, former President Olusegun Obasanjo revealed that in 2007, a consortium offered $750 million to handle both the Port Harcourt and Kaduna refineries. Still, the Nigerian National Petroleum Corporation rejected the proposal.
Obasanjo also revealed that when contacted to take over the refinery, Shell Petroleum Development Company declined because of worries about corruption that could disrupt operations.
Former president, Yar’Adua
Falana noted in a statement made on Friday that the sale needed to be reversed to rectify legal and ethical infractions and defend Nigeria’s national interests.
He stated that, under the Privatisation and Commercialisation Act, the Vice President chairs the National Council on Privatisation, which oversees the privatisation of public firms.
On the other hand, Obasanjo allegedly sidelined then Vice President Atiku Abubakar and handled many privatisation transactions directly.
Falana further alleged that Bluestar Oil, the consortium involved in the refinery purchase, consisted of Dangote Oil, Zenon Oil, and Transcorp. He also indicated that Obasanjo purchased significant shares in Transcorp through “blind trust,” raising concerns about the legality and morality of the deals, many of which took place in the final days of his government.
Falana recounted how, on May 17, 2007, Obasanjo sold a 51% share in the Port Harcourt Refinery to Bluestar Oil for $561 million. Similarly, on May 28, 2007, Bluestar purchased 51% of the Kaduna Refinery for $160 million.
These sales drew widespread criticism from key stakeholders, including the National Union of Petroleum and Natural Gas Workers (NUPENG) and the Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN), who claimed the transactions undervalued the refineries and violated due process.
For example, they stated that the $561 million paid for the Port Harcourt refinery was significantly less than its value of $5 billion.
In June 2007, the unions went on a four-day strike, severely weakening the economy and demanding an investigation into the arrangements.
The federal government assured them that the transactions would be scrutinised. President Yar’Adua then reversed the privatisation of both refineries.
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Falana emphasised that the sale reversal was never legally contested because it breached the Privatisation and Commercialisation Act. He concluded that the unions’ influence and Yar’Adua’s decision helped to protect the national interest.
