sharing in governance of extractive industries

Big Data decoding Big Oil: Nigerian corporate networks

Last month in Lagos, we brought together activists from the tech and oil worlds for a hackathon on the extractive industries of Nigeria. A hackathon, in the lexicon of computer geekery, is what happens when people pool their research, programming, hacking skills to solve a problem or investigate a particular subject, sometimes over a period of several days. Alongside stacks of empty pizza boxes and coffee pots, hackathons often produce a program or application that aims to be usable by a broader community around the field.

This hackathon was part of the Next Generation Governance initiative, which I began to describe in our first post on the subject a while back. It was a one day event at the Co-Creation Hub Nigeria, one of Africa's leading tech innovation centers alongside Kenya's iHub and Egypt's icecairo, which we leveraged to create two web applications. The first is a network visualization of the corporate supply chain in the Nigerian oil industry, which you can see a prototype for here. The second is a map of the oil sector's physical facilities, with a focus on infrastructure in the Niger delta, which you can see the initial results of here (see Johnny West's previous post on the map).

It's old news that Nigeria's oil sector needs new ideas. Much of Nigeria's roughly $50 billion in oil revenues is scuppered away through corruption and misadministration, and the government is missing out on potentially tens of billions more. Increasing internet literacy among Nigeria's booming population offers an opportunity, if not to overhaul the industry, at least to increase citizen engagement around oil and galvanize people to learn more about the sector through open data systems. Internet hubs in Lagos teeming with young, socially conscious tecchies suggest that this sort of engagement may be possible for the first time. Anyone with a web connection can now learn about how the industry is structured and governed. As such the hackathon presented an opportunity for otherwise unengaged Nigerians both to add to that information ecosystem and, by helping develop these applications, learn more about how the oil sector works.

So what exactly does the corporate network show?

The network aims to demystify the corporate players in the Nigerian oil sector by showing their relationships to one another: to begin with, their ownership structures and the contracts they share. Too often when talking about oil, people refer to Exxon doing this or BP doing that. That's fine in a broader sense, and it's very effective when you're an activist trying to rally support around a cause: it's the kind of broad brush-stroking people with a personal stake in the matter can respond to. But this relegates the fight to one against an idea – the big bad oil industry – when it should be against a particular set of actors responsible for a specific piece of malpractice, no matter the sector they are from. Even in cases where nothing has gone wrong, if you're a community advocate working from an office in Port Harcourt, it's better to know who exactly is drilling your backyard rather than wrestling the specter of anonymous Big Oil.

Take a company most people have never heard of, Nigeria LNG Limited – a liquefied natural gas producer with facilities on Bonny Island. As the network shows, the company is a joint venture between Total LNG Nigeria Limited, Shell Gas BV, Eni International BV, and the Nigerian National Petroleum Corporation (NNPC). We see that laterally, there are at least four parties involved in the company's decisions, three of which are local subsidiaries of multinational corporations. This means that vertically, there are many more parties indirectly involved.

Let's follow this ownership and decision-making chain up, starting with Total LNG Nigeria Limited. This JV partner is registered in the United States. The network tells us that it is owned by the French-registered Total Gaz & Electricite Holdings France, which is a subsidiary of Elf Aquitaine SA, which is itself a subsidiary of Total SA. So we see from the network that to get from Nigeria LNG Limited's production facilities in the Niger Delta to the ultimate owners of one of its JV partners in France, we must follow the ownership chain through four companies in three jurisdictions. It is therefore not enough simply to say that “Total” is involved in these or those activities in Nigeria – as the network shows, it is these specific corporate entities, ultimately controlled by Total SA in France, that may be held accountable for the actions of the local producer Nigeria LNG Limited.

What can you do with this sort of data?

The network application is still in its early stages, but we're continuing to develop it to make it more accessible. Even in its current form, though, it can help facilitate investigations into specific companies. The goal is not to provide immediate solutions to problems, but to help journalists and activists, governments and companies start asking the right questions. It is interesting to note, for example, that Total LNG Nigeria Limited receives just a single mention on the Total Nigeria website despite its involvement in a joint venture – Nigeria LNG Limited – which has employed some 18,000 Nigerians indirectly.

Or to see that the Chinese company Sinopec's $7.3 billion acquisition of the Canadian Addax Petroleum Corporation, which made international headlines a few years ago, actually took place through Sinopec's indirect wholly owned subsidiary, Mirror Lake Oil and Gas Company Limited. This doesn't imply dirty dealing, but serves as further evidence of the strategy companies use to make money flows harder to trace and regulate by spreading their activities over a complex web of subsidiaries. It almost goes without saying that Mirror Lake does not even have a website. (Incidentally, searches through the global corporate registry OpenCorporates reveal Mirror Lake to be a company with an inactive Canadian registration; following that trail to the Canadian corporate registry, we found that the British Virgin Islands imported the company's registration in April 2010 - about a year after the Addax purchase. Searches for Mirror Lake on the Virgin Islands' Registry of Corporate Affairs website yielded no results, suggesting the company is effectively untracked in the public domain.)

While the network interface still needs some refining to make companies' assets explicitly clear, even at this stage it gives us some view of the dominant position Conoil Producing Limited holds among indigenous Nigerian producers, with significant stakes in at least four concession areas, in partnership with major international producers like Addax Petroleum Corporation and Total Exploration and Production Nigeria Limited. With further development, we aim for the network to enable comparison of different indigenous producers by filtering search results by company type. Once we integrate records we have pulled from the Nigerian Corporate Affairs Commission, users will also be able to see who the actual shareholders of these indigenous companies are.

So these are still early days. In the coming weeks we aim for the network to surface information more clearly and intuitively, to allow users to start asking relevant questions about the companies and individuals plying their trade in Nigerian oil and, ultimately, use the network as a launching pad for scaled-up journalistic investigations. Stay tuned for more updates from our end.

Amrit Naresh is a research associate at OpenOil, an energy consultancy based in Berlin. You can view the original version of this blog here.

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Comment by Amrit Naresh on February 10, 2014 at 11:30

Thanks for the response, Christiane. We think this kind of information should be of interest not only to journalists, civil society and government, but also to companies who have an interest in keeping a level playing field. There are many potential beneficiaries from a process that aims to keep the competition clean and the players more accountable. As our work progresses, I look forward to keeping the Goxi community informed.

Comment by Christiane Badgley on February 8, 2014 at 1:38

This is interesting and important information. Moving from "big oil" to "local" corporate entities, I wonder how many of them are in reality nothing more than shell companies. With so many registered in secrecy jurisdictions, investigating their activities is no easy matter. As someone who has been frustrated over and over trying to trace the money, I'll look forward to seeing more of your work.


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