Naval chief lands in trouble over multibillion-naira oil bunkering, contract-splitting fraud

ABUJA- Barely seven months into his tenure as chief of naval staff, Emmanuel Ogalla is now battling to save his job after being flagged for his role in aiding a loosely coordinated bunkering of Nigerian crude and multibillion-naira contract splitting fraud, Peoples Gazette can report after reviewing documents and speaking with federal sources familiar.

Mr Ogalla’s sprawling raid of military earmarks has already drawn the awareness of defence minister Bello Matawalle, The Gazette was told, although it was not immediately understood how far he would be willing to go to hold the naval chief accountable. Two sources said Mr Matawalle, until last week, was also still being supplied with details of what they characterised as Mr Ogalla’s “disturbing’ exploits in Nigerian territorial waters.

The Gazette reviewed how Mr Ogalla freed several oil tankers busted for transporting stolen crude off Nigerian shores after receiving kickbacks in millions of American dollars and also rebuffed internal calls to remove his underlings who helped facilitate the scheme —underscoring the steepness of a debased practice that has assailed top players in Nigeria’s oil security and administration for decades.

Mr Ogalla, 55, was named by President Bola Tinubu in June 2023 to replace Awwal Zubairu Gambo, who had faced similar accusations while serving from 2021 to 2023. A defence ministry source mentioned efforts to inform the president had reached an advanced stage.  

How the president would handle the crisis was unclear, and a spokesman declined comments Friday morning. Earlier this month, a minister was suspended from office after the president learnt of her untidy use of public funds. 

But the administration tried to appreciate the perils of the protracted stealing of Nigeria’s oil when national security adviser Nuhu Ribadu cried out in Augustand subsequently suggested an ambitious plan to curtail the crisis. The NSA did not immediately return a request seeking comments. 

Naval and defence ministry sources who sought anonymity to comment on an active investigation told the Gazette that Mr Ogalla’s insatiable lust for ill-gotten fortunes could inflict lasting fissures on the integrity of Nigerian maritime operations, saying they have been pushing internally for an urgent inquiry to mitigate the consequences. 

Preliminary investigations estimated Mr Ogalla had accepted over $170 million in bribes over the past six months alone. In 2022, top Nigerian banker and oil executive Tony Elumelu said over 95 per cent of Nigeria’s crude output is stolen, delivering billions of dollars in annual windfall to perpetrators, who have long been said to range from state governors to administrative workers at the state oil corporation. 

“This is what we were able to estimate so far from our findings,” an official said. “He started offering the services of the Nigerian Navy to crude oil thieves immediately after he was announced as chief of naval staff.”

Mr Ogalle declined comments for this story over two days, despite initially promising to clarify his role after wrapping up a meeting. 

Specifically, log records and videos reviewed by The Gazette showed several instances between September 2023 and January 2024 when the Nigerian Navy dispatched gunboats of personnel to supervise the loading of stolen crude on at least four vessels. The monthslong illicit operation, often carried out at night, was sanctioned by Mr Ogalla, sources told the Gazette.

Officials familiar said other vessels bearing ill-gotten hydrocarbons that were interdicted during routine patrols or based on intelligence tip-offs, often via private security firms, were freed on Mr Ogalla’s orders in exchange for millions of dollars.

For one, oil vessel MT Kali was spotted on January 11, 2024, while allegedly transporting stolen crude from Pennington fields in Bayelsa to another facility in Delta under a naval escort. Officials involved said Mr Ogalla sanctioned the illegal operation. 

MT Tura was detected around the same time to have stolen crude oil from a well-jacket off Ondo in an operation that was only made possible by naval personnel, officials said.

Similarly, personnel of the Nigerian Navy obstructed a lawful search of the oil tanker MT Vinnalaris, which had been trailed from where it was suspected to have loaded stolen crude off Ondo waters. The vessel was intercepted by private security patrolling the waterways, but navy personnel aboard it prevented an inspection on strict orders from top brass, The Gazette heard.

In August 2023, barely two months following Mr Ogalla’s appointment, the Nigerian Navy suppressed a private security contractor’s findings that tanker MT Praisel had loaded stolen crude and should be investigated. Mr Ogalla ordered officials to clear the vessel, claiming it was duly approved by the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) to load 1,114,721 litres of high-pour fuel oil (HPFO) from Greenmac Energy Storage-Tarus Jetty Koko from July 26 to August 8, 2023.

On November 22, 2023, Mr Ogalla awarded 30 contracts to a single firm at $537,672.45 each, totalling $16,130,173.5 ( or N22 billion at prevailing parallel market rates), The Gazette learnt. The procurement for special operations equipment was split into multiple tranches to conceal its total cost and circumvent procurement regulations.

Mr Ogalla proceeded with the secret deal in violation of Section 20(2)e of the Procurement Act 2007, which forbids contract-splitting in any form and carries a minimum five-year sentence.

Military sources said Mr Ogalla has bucked calls to transfer naval officers who have been found culpable of several unprofessional conducts to the dismay of other members of the navy brass and disciplinary unit. Officials attributed Mr Ogalla’s refusal to sanction the erring officers to his plot to continue to use them to carry out his illegal oil operations. 

After initially saying he was wrapping up a meeting and would call back on Wednesday afternoon, Mr Ogalla failed to do so and sidestepped subsequent attempts to reach him. 

The scandal could mark a critical test for Mr Tinubu at a time when the country is being urged to ramp up its security architecture towards the safety of lives and properties and economic development. 

Officials emphasised how the investigation is crucial to Nigeria’s national security, as well as the reputation of the Nigerian Navy.

Under the erstwhile Muhammdu Buhari administration, several serving and retired top military officers faced charges for dissimilar levels of impropriety. The Gazette reported in 2021 how the former chief of army staff, Tukur Buratai, cornered public contracts in contravention of extant code of conduct. 

Earlier in 2016, nine senior officers of the army were investigated by the Economic and Financial Crimes Commission (EFCC) for various levels of complicity in gross malfeasance that rocked the 2015 election. Months later, several other senior officers were purged from the military for violating service rules.

Major General Umaru Mohammed was also convicted and jailed in 2023 after a military court found him guilty of forgery, conspiracy and misappropriation of funds.

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