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Nigeria: Yar'Adua Probes 2005 Oil Licensing Round
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This Day (Lagos)
17 June 2008
Posted to the web 17 June 2008
Chika Amanze-Nwachuku
Lagos
President Umaru Musa Yar'Adua has directed the Director of Petroleum Resources (DPR), Mr. Tony Chukwueke, to proceed on compulsory leave to avoid interference with the ongoing investigation into the award of oil blocks by the regulatory body.
The Federal Government has already directed the investigation committee to review the 2005 bid round, with a view to ascertaining whether due process was followed or not.
Following Chukwueke's suspension, Mr. Sabonberi Aliyu, Head of Administration, has been appointed as the acting Director.
The Federal Government had in June last year set up an investigation panel to the review the 2007 bid round, following the wide-spread criticism that greeted the exercise which was conducted in the twilight of former President Olusegun Obasanjo's regime.
Some industry operators and stakeholders had alleged that the DPR did not follow due process in the manner it conducted the bid round.
The grouse of some of them was what they described as "the indiscriminate award of special privilege of the Right of First Refusal (RoFR) to some companies."
They had complained that some beneficiaries of the RoFR were companies whose "antecedents and credentials are highly questionable" while some of the foreign companies granted the preemptive rights were said to be financially distressed, and might not actualise any development project in Nigeria.
Besides, the stakeholders were aggrieved that some companies that did not comply with the revised guidelines for the 2007 licensing round were allowed to participate in the bid round and were even awarded some blocks.
The guidelines stipulated that participants must pay registration fee, processing and prying fees.
However, some companies were said to have paid only the registration fee.
The team constituted last June was said to have submitted its report to the presidency in August last year and noted that there were irregularities in the manner the exercise was conducted.
For instance, the review team was said to have discovered $330,000 discripancy, which had arisen from the payment of the participation fees.
Sequel to this, the probe team was said to have indicted the DPR in its report and recommended that the authorities be sanctioned for the alleged irregulaties.
President Yar'Adua, who received the report in August last year, was said to have passed it on to the Minister of State for Petroleum, Odein Ajumogobia (SAN), to study and then make comments.
However, almost a year after the report was submitted, and more than one year after the blocks were awarded, winners of the blocks were said to have petitioned the President complaining about the delay in the signing of the Production Sharing Contract (PSC).
They had complained that the loans taken from banks were yielding high interests, whereas the PSC had not been signed.
The Presidency was said to have directed that the signing of the PSC be put on hold pending the completion of the probe.
But dissatisfied with the findings by the initial panel, and coupled with more petitions from stakeholders, the Federal Government constituted another team to revisit the exercise.
THISDAY reliably learnt that the latest probe would also cover the 2005 and 2006 bid rounds.
Determined to establish the fact about the matter, the Presidency on Friday directed Chukwueke, the DPR helmsman, to proceed on compulsory leave in order to avoid interference with the investigation.
An industry official said yesterday that the initial probe team did not dispute the fact that about $502 million was realised from the 2007 bid round.
They were also said to have established that the country raked in over $2 billion in the 2006 and 2007 bid rounds.
Commenting further, he said the government believed that Chukwueke is highly influential in the industry and that his continued stay in the office, while the investigation is ongoing, could hamper the team's work.
He stated that what is going on is simply a financial audit of the 2007 bid-round, adding that the DPR could not have compelled companies that had registered for the bid round to pay processing and prying fees.
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Some aggrieved stakeholders had a few days before the 2007 bid round called on the government to suspend the exercise, alleging that due process might not have been followed.
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