N99b Loan: Seawolf Got No Contract In 2009

Source: The Nation Newspaper Published:Monday, January 25th, 2010

Investigation has shown that Seawolf Oil Services had no major business last year, contrary to claims by First Bank that its N99 billion loan to the company is performing.

Seawolf is prospecting for dredging and oil services contracts from oil majors and has just set up office.

Telephone calls to its Lagos office on Friday were either not answered, or when they were, the lady receptionist repeatedly said Jolomi Omamuli, the Business Development Manager, was in a meeting.

However, oil industry source told Daily Independent that contracts are approved by oil majors at the beginning of every year, and another source confirmed that Seawolf had no major business by April 2009.

The company has not been contracted by oil majors, puncturing claims by First Bank that the loan is performing as and when due.

The bank, which granted the facility in 2008, has set up a disciplinary committee to which everybody involved in the deal, including those who have since left its employ, have been invited to say what they know.

Daily Independent reported on January 19 and 20 that the facility, out of which N85.1 billion has been drawn, was to acquire three rigs.

One the rigs has been purchased, the remaining two are being expected to arrive.

It was learnt that part of the money was used to acquire a Norwegian company.

The board of First Bank, worried by the possibility of having to make such a huge provision amid business uncertainty, has drafted its Executive Director (ED) and Chief Financial Officer (CFO), Oladele Oyelola, to Seawolf in Lagos as Vice Chairman.

His is to ensure judicious management of the company to enable the bank recover its debt.

Seawolf is competing against names like Schlumberger, which is best known for rig and dredging business; as well as against Oceaneering, Transocean, Baker & Hughes, Lone Star International, among others.

Realising the difficulty of breaking in, the company is relying on the quick passage of the Petroleum Industry Bill (PIB), with provision for local content that would give indigenous operators 40 per cent of the industry business volume.

First Bank, especially under the new regime at the Central Bank of Nigeria (CBN), is faced with the trouble of making full provision for the loan which should now be classified lost, in line with the Prudential Guidelines.

However, a highly placed industry source insisted that the loan is not insider-related, even though a First Bank shareholder and Director , Hassan Oye-Odukale, (Chief Executive of Leadway Assurance, a major underwriting firm), is also Seawolf Chairman.

The loan was properly appraised and considered worthy before it was granted by the board, according to the source.

He added that although CBN Governor, Lamido Sanusi, was First Bank ED (Risk Management & Control) when the loan was granted by the bank’s board, with Jacobs Moyo Ajekigbe as Chief Executive Officer (CEO), Sanusi has no blame in the matter.

The source, a former ED (Risk Management) and Managing Director (MD)/CEO, maintained that the buck stops at the table of whoever is CEO.

He said that was why Bernard Longe was the only one sacked by First Bank in the botched deal by the International Investors (London) Limited to acquire a 51 per cent stake in the Nigerian Telecommunications Limited (NITEL).

According to him, credit appraisal begins from the Account Officer and moves to Assistant and Deputy General Managers, the Credit Committee, Board Credit Committee, and then the entire board before it is approved.

All these steps will not still stop a loan from going bad, nonetheless.

The ED, he stressed, did not inspect the rigs, that not being his job, since he relies on the documentation presented by various officials, believing in their sincerity of purpose before signing off.

But another top bank source disagreed, wondering whether a bank’s Chief Risk Officer is a mere rubber stamp in the credit appraisal and granting process.

Seawolf was registered on April 17, 2007, with number 687914, and shware capital of N5 million.

Its Directors are Adolor Uwamu Abraham (50 per cent of share capital), Adetunji Oduntan (10 per cent), and Remi Okunlola (40 per cent).

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