Falana-Led ASCAB: Yar’Adua Reversed Refinery Sale to Dangote Over Obasanjo’s Stake in Consortium

The Falana-led ASCAB reveals that former President Yar’Adua canceled the refinery sale to Dangote due to Obasanjo’s alleged shares in the purchasing consortium.

A group led by human rights lawyer Femi Falana (SAN) has disclosed that the late President Umaru Musa Yar’Adua canceled the contentious sale of the Port Harcourt Refinery to a consortium headed by Dangote Oil. This decision was made after it was determined that the deal did not serve the nation’s best interests.

In a statement on Friday, the Alliance on Surviving Covid-19 and Beyond (ASCAB) mentioned that former President Olusegun Obasanjo had sold 51% of the Port Harcourt Refinery to Bluestar Oil for $561 million.

According to ASCAB Chair Falana, Bluestar Oil was a consortium made up of Dangote Oil, Zenon Oil, and Transcorp. On May 28, 2007, in a comparable deal, Bluestar Oil purchased 51% of Kaduna Refinery for $160 million.

Bluestar Oil was a consortium composed of three domestic companies: Dangote Oil, Zenon Oil, and Transcorp. Prior to the deal, President Obasanjo had acquired significant shares in Transcorp through a “blind trust.”

Falana alleged that numerous interest groups in the country challenged both the legal validity and moral appropriateness of the sales, which were finalized during the final days of the Obasanjo Administration. He also highlighted concerns about potential conflicts of interest.

The senior lawyer highlighted that, according to the Privatisation and Commercialisation Act, the Vice President acts as the chairman of the National Council on Privatisation (NCP), which is responsible for supervising the sale of public enterprises.

Reports indicate that Obasanjo bypassed then-Vice President Atiku Abubakar and took direct control of the privatization process for several major national assets.

Falana stated that on May 17, 2007, President Obasanjo sold a 51% share.

According to Falana, on May 17, 2007, President Obasanjo sold a 51% stake in the Port Harcourt refinery to Bluestar Oil for US$561 million.

He mentioned that in a separate transaction on May 28, 2007, President Obasanjo sold a 51% stake in Kaduna Refinery to Bluestar Oil for $160 million.

He observed that the two influential trade unions in the oil industry, namely the National Union of Petroleum and Natural Gas Workers (NUPENG) and the Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN), opposed privatizing the two refineries due to concerns about conflict of interest and insufficient adherence to proper procedures.

They also claimed that the country had been shortchanged, stating that the shares purchased in the Port Harcourt refinery for $516 million were actually valued at $5 billion.

Falana stated that both unions, believing the deals were not in the national interest, launched a four-day strike in June 2007 that nearly crippled Nigeria’s economy. The strike ended when the federal government assured them of a thorough investigation into the deals.

He stated that after the federal government concluded its investigation, then-President Umaru Yar’adua canceled the proposed privatization of the Port Harcourt and Kaduna refineries.

It is documented that the cancellation of the privatization went unchallenged in court, despite being conducted against both the letter and spirit of the Privatisation and Commercialisation Act.

The Alliance on Surviving Covid and Beyond (ASCAB) urges NUPENG and PENGASSAN to strengthen their longstanding efforts as a counterbalance against the renewed push for privatizing the nation’s refineries.