Nigerian billionaire Arthur Eze named in $2 billion fight over oil pipelines

Nigerian oil billionaire Arthur Eze has been drawn into a public fight over one of the most lucrative and least transparent businesses in Africa's oil industry: the private contracts Nigeria pays to stop thieves and saboteurs from draining its pipelines.

The claim comes from Asari Dokubo, a former rebel commander whose armed group attacked oil facilities in the Niger Delta in the 2000s. In a video that spread across Nigerian social media from Oct. 5, Dokubo alleged that a small circle of traditional rulers and businessmen collect ₦2.7 trillion, or about $2 billion, a year to protect the pipelines. He presented no contracts, payment records or other documents to back the figure.

Eze, the founder of Atlas Oranto Petroleum, one of Africa's largest privately held oil exploration companies, was one of the people Dokubo singled out. "When Arthur Eze takes that contract, it is not Niger Delta money; it is Arthur Eze's money," he said.

Dokubo gave no value for any contract linked to Eze, no dates and no description of the work. ThisDay, one of Nigeria's leading newspapers, characterized Eze as having been named "a former holder of a pipeline-related contract." Billionaires.Africa found no public record of a current pipeline surveillance contract held by Eze or his companies, and no public response from him.

Why pipeline protection is big money

Nigeria is one of Africa's largest oil producers, and crude sales are the government's main source of foreign currency. Its thousands of kilometers of pipelines run through the creeks and mangrove swamps of the Niger Delta, where gangs tap the lines, steal crude and refine it in makeshift camps. Theft and sabotage became so severe that in 2022 Nigeria's oil output fell to about 1 million barrels a day, its lowest level in decades.

Rather than rely only on the army and navy, the government has handed pipeline security to private contractors, many of them run by or tied to the same former militants who once attacked the industry. The best known is Government Ekpemupolo, a former rebel commander known as Tompolo, whose Tantita Security Services won a contract in 2022 reported to be worth about ₦4 billion, or $3 million, a month. Oil output has recovered since, and the contracts have become a prize fought over by the region's power brokers.

Dokubo's complaint is that Tompolo takes the criticism while others quietly earn more. "They are collecting N2.7 trillion a year. You are calling Tompolo, who is collecting less. I'm not in that contract," he said.

Who he accused

His main targets were Ogiame Atuwatse III, the Olu of Warri, a traditional king whose realm sits in the heart of Nigeria's oil country, and Osahon Okunbo, the son of the late billionaire businessman Hosa Okunbo, whose family is linked to the pipeline surveillance company Pipeline Infrastructure Nigeria Ltd. He also claimed to have seen a vessel marked "OUK," which he tied to Orji Uzor Kalu, a senator and former state governor, "operating in our waters." No ownership records supporting that claim have been published.

The Olu's camp hit back the next day. Prince Collins Oritsetimeyin Edema, who represents the king in dealings with the state oil company NNPC Ltd., called the claim "completely false." "We challenge Mr. Dokubo to produce the documentary evidence," he said.

A regional group, the Niger Delta Coalition, called the allegations "baseless and unsupported by credible evidence" and warned they could stir tensions between the Ijaw, Itsekiri and Urhobo, three ethnic groups whose rivalries around the oil city of Warri have turned violent in the past.

A number that does not add up

Dokubo first described the ₦2.7 trillion as a monthly figure before correcting himself on camera. Even the annual figure is many times larger than anything on the public record. It is more than 56 times the reported value of Tompolo's contract. A 2022 claim put the Okunbo-linked contract at about ₦138 billion, or $104 million, a year, a figure that was disputed at the time. NNPC has reported spending ₦267.98 billion, or $201 million, on pipeline security over a 16-month period.

Analysts quoted by ThisDay suggested Dokubo may have confused the value of the oil flowing through the pipelines with the fees paid to guard it. Others said former militant leaders were using public pressure to push President Bola Tinubu's government to spread the contracts among more beneficiaries.

Dokubo has history as a disruptor. In 2004 his threat of all-out war against the Nigerian state and oil companies helped push world oil prices above $50 a barrel for the first time. He was later jailed on treason charges and released in 2007.

The billionaire in the middle

Eze, 77, is one of Nigeria's wealthiest oilmen. His Atlas Oranto group, made up of Oranto Petroleum and Atlas Petroleum International, holds exploration interests in 22 countries and is the largest indigenous exploration group in Africa by acreage. Its strategy is to win early-stage licences and then sell majority stakes to bigger companies that can afford to drill.

That model has come under strain this year. Senegal withdrew Oranto's offshore licences in January. South Sudan declined to renew its Block B3 licence in April, saying a $500 million investment pledge made in 2017 was never honoured. Oranto also sold a 75% operating stake in a block off São Tomé and Príncipe to Brazil's Petrobras, cutting its holding to 15%.