Nigeria: NNPC Probe - Reps Uncover $210m Oil Block Money
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Leadership (Abuja)
25 July 2008
Posted to the web 25 July 2008
Philip Nyam
The House of Representatives ad hoc committee investigating the activities of the Nigerian National Petroleum Corporation (NNPC) and its subsidiaries yesterday discovered that the whereabouts of the sum of $210 million paid by Shell Petroleum to the Federal Government as signature bonus for the allocation of an oil block (OPL 245) was yet to be traced.
Meanwhile, the DPR has asked for time from the committee to enable it ascertain the payment or otherwise of the money.
The committee, chaired by Hon. Igo Aguma, citing a report submitted by Nigeria Extractive Industries Transparency Initiative (NEITI), noted that the said money had been paid to government through the Department of Petroleum Resources (DPR) since December 2003.
The Director of DPR at the time, Mr. Macaulay Ofurhie, and present Director of Finance, Mr. Babatunde Ajimoti, said if such money existed it might have been paid into the Escrow account in view of the dispute between Shell and Malabo Oil who were allegedly allocated the same oil block before it was reversed. The two officers, however, clarified that negotiation at that level was beyond the DPR.
Malabo had paid $210 million for the oil block but it was later withdrawn and awarded to Shell, which paid $1 million to indicate ownership. Malabo then went to court to challenge the reversal of the deal.
The committee also discovered through the NEITI report that Zebra Oil Ltd had paid $20 million for the allocation of OPL 248, but DPR records again indicated that only $19 million was paid, leaving a balance of one million dollars.
According to Ofurhie, the Petroleum Act of 1988 permits the Minister of Petroleum to use his discretion in awarding oil blocks. He disclosed that former President Olusegun Obasanjo personally forwarded the list of preferred bidders for OPL 256 to the DPR for processing, hence the department had no powers to question anybody.
"We had a mini-bid or discretionary bid in October 2002 where they bidded for OPL 256. It was a selective bidding where we had a letter from the Presidential Adviser on Petroleum and the letter was signed by Mr Funso Kupolukun who was the Special Assistant on Petroleum, the letters were for bid on 256 dated October 2002 and we had some bid list that originated from there and we now processed the bid and we had only two bidders. Only two responded, and that is Ocean Energy Nigeria and Statoil, with the latter winning the bid."
Speaking on the approvals to award the blocks, he said, "It was a superior approval. I remember I requested for that and I got it. The letter came with a list and we had the option of adding. We were not comfortable with the list and I remember I told him if we could make it more robust.
"The main criterion we used was the signature bonus which was 70%. The criterion also came with the letter which was heavily in favour of the signature bonus.
"It was selective bidding, it was not advertised. I mean OPL 256. It was the President who was the minister then."
On the issue of marginal fields, Mr. Ofurhie disclosed that 24 marginal fields were processed and given out in 2004. Collaborating his presentation, DPR director of legal services, Mrs. Elizabeth Akah, told the committee that Obasanjo personally issued regulations for the disposal of the marginal fields.
She said the former President signed the regulations both as President and Minister of petroleum, which were handed over to the DPR to work with.
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Answering questions on the handling of application and process fees by the department, the suspended director of DPR, Mr. Tony Chukwueke, disclosed that prior to 2004 application and processing fees were paid into the federation account. He said they were paying the proceeds into the Central Bank of Nigeria (CBN).
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Am not sure that the House of Rep committees are serious. All those they discovered before, nothing happen. Or what happened to the power probe, or is it because Aremu Obasanjo was involved. If you know that you can not do the joy, please stop deceiving the poor poeple of this nation. May God gaves us a Rawllings in Nigeria, with another Idiagbo. Amen. The hardship is too much, please do something that will make the poor man on the street feel happy, with sense of belonging.