Stanley Nkwazema
8 July 2008
Abuja — More oil blocks may be revoked following moves being made by the House of Representatives Ad Hoc Committee investigating the Nigerian National Petroleum Corporation (NNPC), its subsidiaries and the Department of Petroleum Resources (DPR).
THISDAY was also informed last night that the committee will urge President Umaru Musa Yar'Adua not to sign the Production Sharing Contract (PSC) agreements with the companies which won oil blocks during the controversial 2005 and 2007 bid rounds.
THISDAY investigations revealed that despite the fact that the committee is yet to commence public hearing on the agencies, it has gone far in its preliminary investigation and has discovered that in spite of the anomalies believed to be inherent in the bid rounds between 2005 and 2007, the Federal Ministry of Finance is allegedly asking the president to sign the PSCs.
THISDAY had reported yesterday that the Federal Government had reversed the award of Oil Prospecting Leases (OPLs) 226, 2005 and 2006 to two Indian oil companies, Essar Exploration and Production Limited and Sterling Global Resources Limited, during the 2007 round, but many more may now follow.
This is because some of the blocks awarded between 2005 and 2007 were based on the fact that the preferred bidders all agreed to invest in the downstream sector.
Some promised to invest in refineries, railways, power, roads and the Nigerian leg of the Trans Saharan Gas Pipeline.
But the lawmakers have discovered that none has done anything since they got the offers. This principle of "backward integration" was used to preferentially allot blocks in 2005, 2006 and 2007.
The 2006 bids were for only those who promised to provide the infrastructure. ONGC Mittal Group promised to build a 180bpd refinery, construct the East/West railway, and build 2000mw power generating plant. The investment was supposed to commence immediately after the award.
It was also discovered that out of the lot, only Korean National Oil Corporation (KNOC), which won OPLs 321 and 327 and were allegedly granted a discount on the signature bonus by former President Olusegun Oba-sanjo, commenced consultancy service for their downstream commitment in respect of the Trans Saharan Gas Pipeline which is the bedrock of the success or failure of the gas policy.
This development is coming just as the special committee of the House has confirmed that it would commence the public hearing of the investigation next week with the DPR.
The committee is, however, said to not be impressed with the DPR for not coming up with the documents so far demanded so that they would commence the hearing.
THISDAY was told that the committee had two months ago written to the DPR to certify all the documents in court and make available all the papers relating to the bid rounds conducted between 1999 and 2007.
The agency was given up till June 21 to submit all the required documents, but it did not meet up and only submitted what one committee member described as "snippets" on Wednesday July 2.
The committee had earlier requested for the guidelines, names of the companies that participated in the round, reason for non pre-qualification and the list of those that won, how much was paid and to which accounts the payments were made - all on a bid-by-bid basis.
The House has however threatened to invoke its constitutional powers to ensure that DPR make it available before the opening day of the first leg of the hearing which has been scheduled for Monday July 14, 2008.
It was also gathered yesterday that the Director of DPR, Mr Tony Chukwueke, who has been suspended, has been directed to report at the National Assembly when the public hearing starts.
Chukwueke is at the centre of the investigation and could provide the necessary leads needed by the House in its report on DPR's activities within the period he served.
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