Leadership (Abuja)
Philip Nyam
12 September 2008
The House of Representatives committee investigating the Nigerian National Petroleum Corporation (NNPC) and its subsidiaries has invited the former Group Managing Director of the NNPC, Engr. Funsho Kupolokun, and the corporation's Head of Legal Department, Mrs. Sena Anthony, to appear before it to explain the controversy surrounding the operation of oil blocks.
The Chairman of the Committee, Hon. Igo Aguma, who announced this at yesterday's hearing, said that the panel was probing the NNPC over Back-in (leasing out some of its blocks to some companies to manage on its behalf).
He disclosed that NNPC had given out five of such blocks and one of such was given out at the sum of $2.3 billion, adding that the committee would like to know the procedure with which the blocks were given out. "We will like to know why an operator became a regulator and why the corporation has refused to operate the blocks at 100 percent capacity. The former GMD of NNPC, Funso Kupolokun, under whom the agreement commenced in 2003, and the Head of Legal Department of NNPC, Mrs. Sena Anthony, must appear physically to answer the questions," he ordered.
The adhoc committee of the House investigating the operations of the oil sector between 1999 and 2008 was yesterday told that Memoranda of Understanding signed with some oil companies might not be feasible just as the committee gave an indication that the 2006 bids for some oil blocks were characterised by sharp practices.
Aguma said the committee had noticed that some officials of DPR, NNPC and the Ministry of Petroleum were not forthcoming with information that could assist the panel get to the root of the issues being investigated. He warned witnesses from the organisations to bring out information at their disposal, stressing that an avalanche of information was already available to the committee.
"There is not going to be a collective responsibility, but individual sanction. Any witnesses appearing should state everything at his or her disposal. The committee already has a lot of information and it is up to the representatives of those organisations to say everything at their disposal. The constitution empowers us to investigate and that is what we are doing," he said.
While cross-examining the representatives of ONGC-Mittal Energy Limited, led by Dulal Halder, the committee discovered that some names of oil companies were substituted with others to favour some of them in the bid rounds carried out by DPR, pointing out that in 2006 in particular, it was rampant. They cited the instances of OPL 246, renamed 291, and 216 renamed 297, allegedly given to ONGC-Mittal, adding that some details were not contained in the technical report prepared by DPR.
In his presentation, the representative of DPR, Mr Abiodun Ibikunle, a deputy director, explained that it was the suspended Director of DPR, Mr Tony Chukwueke, who handled the 2006 bid round and would be in a position to shed light on issues surrounding the exercise. The committee also said that applications for OPL 216 and 246 could not be traced in the files submitted by DPR, adding that OPL 246 was awarded to ONGC Mittal after the bid round for 2006 had been closed. The committee also said that from the records submitted on OPL246, the block had been awarded to an oil company before DPR gave it out to ONGC-Mittal.
"You are infringing on another organisation's claim to OPL 246," the committee said. At this point, the DPR representative admitted that it was an error to do so.
The representative of the Legal Department of NNPC, Alhai Ibrahim Bello, explained that the implication of the situation is that the oil licences would be revoked. "If in the reasonable opinion of NNPC, the downstream projects are not realisable, it leads to revocation," he said, adding that NNPC was not given any copy of the MOU.
On the OPL 281 and 295 awarded to Transnational Corporation (Transcorp), the DPR representatives disclosed that the organisation paid $30 million as part of the signature bonus and was not able to part with the remaining part and therefore had lost the amount because the period of payment had lapsed. They also said that the money had been remitted to the federation account and the oil blocks returned to the national basket. The NNPC representative made a case for more oil blocks for the corporation, saying that NNPC had asked for more oil blocks but was denied and it should be allowed access to some of the blocks returned to the national basket.
Meanwhile, the House of Representatives yesterday increased from N50 million to N250 million the approving capacity for ministers while heads of extra-ministerial departments and parastatals are to henceforth award contracts to the tune of N100 million. Ministers are not allowed to approve contracts beyond N50 million
This was part of amendments to the Public Procurement Bill considered by the House in the committee of the whole presided over by the Deputy Speaker, Hon. Usman Nafada. The bill, which passed second reading only yesterday, was given speedy consideration following the appeal by Speaker Dimeji Bankole stressing the importance of the bill in the implementation of budgets.
He said the development had become imperative in order to facilitate the effective implementation of amendment budget by President Umaru Musa Yar'Adua when it is finally passed by the National Assembly.
Also, the House in the amendment approved the removal of Minister of Finance as chairman of the council as it gives powers of appointing the chairman who must be an independent body to the President.
Similarly, members viewed the delay in processing contract papers in the Bureau of Public Procurement and approved a 60-day grace period for processing of international competitive biddings, 45 days for every national contract bidding and 30 days for local purchases.
The House approved the inclusion of the Nigeria Institute of Quantity Surveyors in the new membership of the National Council of Public Procurement while the NBA and NACCIMA retained their position. However, the House rejected the inclusion of the media, civil society organisations and the Nigeria Society of Engineers (NSE) on the board of the BPP.
Nafada, who chaired the committee of the whole during consideration of the amendment act, said the need to streamline the duration of contract processes was to guide against delays in implementing capital projects and the indiscriminate returns of funds meant for capital projects to government treasury.
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