Tony Elumelu reveals Buhari and Abba Kyari blocked his oilfield takeover in 2017

The Chairman of Heirs Holdings, Mr Tony Elumelu, has revealed how former President Muhammadu Buhari and his Chief of Staff, the late Abba Kyari, blocked his first attempt to acquire an oil field in 2017.

Elumelu, who is also chairman of United Bank for Africa Plc, said this in an interview with The Financial Times. According to him, Heirs Holdings had been looking to buy an oil field since 2017 and had raised $2.5 billion to buy one.

But he alleged that Buhari and the late Abba Kyari blocked the deal.

He said he was told that Nigeria could not allow something of such strategic importance to fall into the hands of a private operator. According to Elumelu, this defied logic, as he had allegedly bought it from a foreign company.

However, Elumelu’s decision to buy a 45 percent stake in an oil field three years ago surprised many. International oil companies including Shell, Total and Eni have been selling their shallow water assets in Nigeria, with local companies taking over. In 2021, his Heirs Holdings acquired OML 17, an onshore oil field, as part of a deal that included $1.1 billion in financing from a consortium of global and regional banks and investors.

Shell, Total and Eni have each sold a stake in the OML 17 field, which has a production capacity of 27,000 barrels of oil equivalent per day and estimated reserves of 1.2 billion barrels of oil equivalent, Heirs said.

When asked if he fancied jumping in at the end of the party by buying an oil asset in the era of energy transition and environmental, social and governance investments, Elumelu said: “We wanted to become a Fortune 500 company and we estimated what we needed. It’s not naira, it’s huge dollars.”

Energy security is crucial for a country that does not produce enough electricity for its approximately 200 million people, he added.

He said he had discovered first-hand why international oil companies partially withdrew from their onshore assets after criminal gangs began stealing crude oil from its pipelines.

In 2022, when the situation had reached the point where his company had to shut down production, Elumelu vented his frustration on social media, tweeting: “How can we lose over 95 percent of oil production to thieves?”

But today, business is better. Elumelu showed the status updates he received on his phone from the field, according to the newspaper: 42,000 barrels of crude being pumped daily. Theft still costs about 18 percent of production, he said.

When asked who was behind the oil theft in the country, he said: “This is oil theft, we are not talking about stealing a bottle of coke that you can put in your pocket. The government should know; they should tell us. Look at America – Donald Trump was shot and very soon they knew the background of who shot him. Our security services should tell us who is stealing our oil. You bring ships into our territorial waters and we don’t know?”

The proponent of Africapitalism stressed the need for the private sector in Africa to actively contribute to the growth of the continent.

“We need to run government like a business,” he says, is how African governments should operate, with governments held accountable by legislatures, just as shareholders hold CEOs accountable.

Elumelu, whose father was a construction worker and his mother a caterer, said of his career path: “I’ve had a very fast career.”

At the age of 26, after obtaining a master’s degree in economics from the University of Lagos, he became a branch manager of the bank where he started his career. “That was unheard of. I like to take my destiny into my own hands.”

Elumelu headed the UBA for another five years, until a central bank decree that removed long-serving bank bosses from office took his job away.

“2010 was a crucial year for me,” he said when speaking about his resignation as UBA boss.

“The central bank’s statement was a complete surprise. Was it fair? Look, as someone who believes in governance, it probably makes sense, but it was a shock. But it was also liberating, catalytic,” he added.

Towards the end of that year, he founded Heirs Holdings, the investment machine that launched the second half of his career and transformed him from a banker into a multi-sector magnate.

“I don’t just live for myself or my family, I know people look up to me,” he said of his fame outside the boardroom.

“I try not to disappoint people. Young Africans need role models, they want people they can look up to,” he added.

If Elumelu is thriving, his country is certainly not. Nigeria is in the grip of its worst economic crisis in a generation, with growth stagnating and inflation at levels not seen in almost three decades.

Elumelu’s philosophy of ‘Africapitalism’ is based on the premise that the continent cannot grow through government alone, and that the private sector must actively invest, even when – especially when – socio-economic conditions are difficult.

“We could sit here today and the easiest part of the conversation would be to talk about all the things that went wrong, all the things that people didn’t do.

“But therein lies the philosophy of Africapitalism. For too long we have blamed foreign powers. We have blamed our own leaders. But what are we doing as the private sector to make things better? It is a call for the private sector to stand up and show the way. Let us show the way through what is in our own power. We have the power to make investment decisions.”

With investments in 20 African countries and thousands of employees, he believes he is playing his part. And through grants from his eponymous foundation, he says he is “democratizing happiness” for young entrepreneurs.

“I have my frustrations across the continent, but I also have my victories… What I am saying is that we have to do something to have a better society.”

As a member of President Bola Tinubu’s presidential economic advisory committee, he is one of the few business leaders close to the government. The reforms Tinubu — whose “courage” Elumelu appreciates — has implemented are necessary for long-term growth, Elumelu said, but he wondered whether the sequence of removing expensive but popular fuel subsidies and a sharp devaluation of the naira currency could not have been better implemented to first provide a social safety net for the most vulnerable in society.

“I support it, completely,” he says of the emigration of talented young Nigerians. “I have no problem with people saying ‘I’m going to Canada, the UK or the US.’

“Unemployment is the betrayal of a generation. You go to school and you come back with your dreams and aspirations and you don’t have the opportunity… People who decide to look for solutions elsewhere, no one should stop them. But those who decide to stay should try to make an impact and build a legacy.”

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