A decade-long saga of failed oil ventures and mounting debts has plunged First Bank into a bitter dispute with media baron Nduka Obaigbena, exposing the fragility of Nigeria’s oil-backed financial deals.
In 2011, Nigerian oil company Atlantic Energy secured a loan from First Bank to develop oil assets, using the assets themselves as collateral. When Atlantic Energy failed to deliver on its obligations, the oil lease was revoked by Nigerian authorities and First Bank was left exposed to a non-performing loan (NPL) of $718m.
A decade later, in 2021, First Bank entered into a new agreement with General Hydrocarbons Limited (GHL), owned by Obaigbena, to fund oil mining lease development. By then, the Asset Management Company of Nigeria (AMCON), a government body tasked with clearing toxic assets, had stepped in, reducing the debt to $600m and taking it off First Bank’s books.
An agreement was hashed out between AMCON, First Bank and GHL where First Bank would fund GHL’s operations, with profits from Obaigbena’s company used to settle the $600m debt over eight years. AMCON retained the right to recover the funds directly from First Bank if it failed to meet its obligations.
First Bank has since paid over $225.8m to GHL for its mining activities. However, none of this has been allocated toward repaying the $600m debt, contrary to the agreement.
GHL blames First Bank for delays in releasing funds – sometimes by up to two months – which it says hampered operations and forced it to pay a $100m judgment loss to Norway-based Dolphin Drilling. Meanwhile, First Bank, under the leadership of Femi Otedola, accuses GHL of diverting the funds and has obtained court orders to seize some of GHL’s assets as part of its recovery efforts.
We take a look at the key players in the crisis.
Diezani Alison-Madueke
Nigeria’s oil minister from 2010 to 2015, DiezaniAlison-Madueke remains the only woman to hold the position.
The ex-minister has been at the centre of several corruption scandals and is being investigated in many jurisdictions. She has been under investigation by UK authorities since October 2015, and just this month, the US repatriated $53m linked to her while assets worth hundreds of millions of dollars have been confiscated.
The US Department of Justice had accused Alison-Madueke of having an interest in Atlantic Energy, which received several oil deals during her tenure as minister. She is set for trial in the UK at the beginning of next year.
Kola Aluko
Kola Aluko, the CEO of Atlantic Energy, is an ally of Alison-Madueke and has also been implicated by authorities for shady oil contracts running into billions of dollars.
Atlantic Energy entered into a partnership with the Nigerian Petroleum Development Company (NPDC), a subsidiary of the national oil firm, the NNPC, to develop OML (oil mining lease) 26, 30, 34, 42 and other oil assets under strategic alliance agreements.
It was while Atlantic Energy was trying to finance some of these oil assets that it secured the loan from First Bank.
Both Nigerian and American authorities have seized properties worth over $100m from Aluko including his luxury yacht which was once rented by Jay-Z and Beyonce.
Olajide Omokore
Olajide Omokore is the chairman of Atlantic Energy and a close friend of Aluko and Alison-Madueke. When Aluko and Alison-Madueke fled Nigeria, Omokore stayed behind and was arraigned by the Nigerian government for $1.6bn worth of fraud.
In 2023, a federal court acquitted Omokore of all charges while two government officials were jailed for receiving bribes from his company. Nigerian authorities rejected the judgment and have vowed to file an appeal.
Bisi Onasanya
Bisi Onasanya was managing director of First Bank when the loan was approved for Atlantic Energy. Sources say the bank faced many challenges during his tenure but only came to light after his exit in December 2015.
An audit by the Nigeria’s central bank after Onasanya left found that the First Bank was in financial distress. “The problems at the bank were attributed to bad credit decisions, significant and non-performing insider loans and poor corporate governance practices,” the central bank said in a statement at the time.
“The shareholders of the bank and FBN Holding Plc also lacked the capacity to recapitalise the bank to minimum requirements,” it said.
Onasanya and others are set to be arraigned for alleged fraud worth N12.3bn ($7.4m).
Oba Otudeko
Oba Otudeko was chairman of First Bank when the loan was approved to Atlantic Energy. He was for years the most powerful individual at the bank until he was sacked as chairman of First Bank Holding Company by the central bank in 2021.
In a letter to the Central Bank, media baron Obaigbena said his meeting with Otudeko revealed that the initial loan given to Atlantic Energy did not follow due process.
Otudeko is expected to be arraigned alongside Onasanya for alleged fraud in a separate case.
He is believed to have left Nigeria. While Otudeko family sources have told Nigerian reporters he has not fled to Dubai, other sources have pointed to London.
Nduka Obaigbena
Although the debt predates his involvement, Nduka Obaigbena, who came in on a rescue mission, has been unable to help the bank in defraying its debt despite loans of over $200m from First Bank to his oil company.
The bank’s debt profile has only increased in the process with many insiders questioning why he was brought in in the first place.
Femi Otedola, now chairman of the bank, is insisting on recovering the loans from Obaigbena.
(Africa Report)
