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UPDATE 3-Nigeria arrests oil tycoon as corruption probe widens

Tue, 06th Oct 2015 18:21

* Oil company chairman interrogated - official

* Arrests follow president's clean-up pledge

* New head of state oil firm on cabinet list (Adds Switzerland asked for help in connection with 2nd tycoon)

By Julia Payne and Felix Onuah

ABUJA, Oct 6 (Reuters) - Nigeria has arrested the chairmanof a local oil firm, a security official said on Tuesday, aspart of a widening graft investigation in Africa's biggestpetroleum producer that has also netted former oil ministerDiezani Alison-Madueke.

Days after British police detained Alison-Madueke, one ofAfrica's most powerful women, the official said Nigeria'sEconomic and Financial Crimes Commission (EFCC) had arrestedAtlantic Energy chairman Olajide Omokore on corruption and moneylaundering charges.

The arrests, which follow pledges by President MuhammaduBuhari to "clean up" Africa's biggest economy, have sentshockwaves through Nigeria's globe-trotting corporate andpolitical elite.

"A lot of people have been shocked," one oil executive inNigeria told Reuters. "The net is widening and it's not clearhow deep the rabbit hole goes. There will be a few peoplelooking over their shoulders."

In response to a Reuters query, Switzerland's office of theattorney general said it had received a request from Nigeria for"mutual assistance" in connection with Nigerian tycoon KolawoleAluko and energy firms linked to him.

The EFCC official said Omokore, listed by Forbes magazine in2012 as one of "Ten Nigerian multi-millionaires you have neverheard of", remained in custody.

"He is being interrogated," the official, who did not wantto be identified, told Reuters. He gave no further details.

Omokore's lawyer and a spokesman for his company could notbe reached for comment. Aluko's office did not respond torequests for comment.

Alison-Madueke, whose house in Abuja was raided by Nigerianpolice on Friday night, was accused by former central bankgovernor Lamido Sanusi of presiding over a state oil sector thatleaked tens of billions of dollars during her five-year tenure.

Sanusi was sacked by then-President Goodluck Jonathan afterraising concerns that $20 billion in oil revenues had not beenremitted to government coffers by the state oil firm, NNPC,between January 2012 and July 2013.

Sanusi also criticised Alison-Madueke for giving Atlantic -then an unknown start-up - a contract with the NNPC shortlyafter becoming oil minister in 2010. She left office in Mayafter Buhari's election victory over Jonathan two monthsearlier.

Alison-Madueke has denied any wrongdoing. Attempts to reachher in London have been unsuccessful.

DEALS

The arrests have turned the spotlight once again onNigeria's oil sector and suspicions that oil theft, graft andmismanagement have created an ultra-rich elite in an economytypified by poverty, power cuts and shaky public services.

Atlantic Energy was one of two firms that signed so-calledStrategic Alliance Agreements with NNPC's upstream arm, NPDC, inMay 2011 to manage oil blocks sold by oil major Royal DutchShell.

The second deal was signed with Seven Energy through acompany called Septa Energy, of which Aluko was co-CEO.

At the time, parliament criticised the two deals, which hada combined value of $6.6 billion, as having been subject to nobidding process.

Sanusi also questioned the logic behind them, saying theywere simply transferring state assets into private hands. Heidentified the set-up as one of the three main methods throughwhich he believed the NNPC was losing billions.

The Natural Resource Governance Institute, a U.S.-basedwatchdog, has also criticised the NPDC for holding ontosubstantial revenues despite having limited operational costs.It made an estimated $6.28 billion over a 19-month period in2012-2013.

Since coming to power, former military dictator Buhari hasordered an audit of NNPC, the central bank and other key stateinstitutions, saying as much as $150 billion was stolen from thestate over the previous decade.

CABINET LIST

Four months after being sworn in, Buhari has failed tonominate a cabinet - to the chagrin of the business and investorcommunity - but has made clear he will preside personally overthe petroleum sector to push through reforms.

A cabinet list sent to parliament on Tuesday includedEmmanuel Ibe Kachikwu, a former Exxon-Mobil manager appointed tothe helm of the NNPC in August after Buhari sacked the previousboard in the first move of his reform drive.

Kachikwu's portfolio was not specified but oil industrysources say he is set to become state petroleum ministeroverseeing daily operations under Buhari.

It was not immediately clear who will run NNPC in his stead.Oil industry sources also said Buhari might appoint a specialadvisor for oil.

Buhari has also overseen the cancellation of controversialcrude-for-product swaps and a costly refinery crude supplycontract.

Kachikwu announced an audit of NNPC byPriceWaterhouseCoopers that is expected to be completed inDecember, sources familiar with the matter said.

He also said that the NNPC would review upstream productioncontracts and split the state-owned firm into smaller units toimprove efficiency and end corruption. (Reporting by Julia Payne, Felix Onuah, Ulf Laessing, CamillusEboh, Chijioke Ohuocha, Joe Brock in Johannesburg and JoshuaFranklin in Zurich; Writing by Ulf Laessing; Editing by EdCropley and Susan Thomas)

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