Leadership (Abuja)
Philip Nyam
2 October 2008
The House of Representatives Ad hoc Committee investigating the Nigerian National Petroleum Corporation NNPC) and its subsidiaries may have recommended the cancellation of the award of all controversial oil blocks.
It was gathered that the committee, which has been meeting at the level of the four chairmen, may have recommended the cancellation of the blocks awarded to ONGC Mittal, Korean National Oil Corporation and the Chinese Oil Corporation (CNOC) due to the controversies surrounding their ownerships and identities.
According to a source, the committee heads who met before the House went on Sallah break decided that the clause which gave one of the companies the right to produce 650,000 bpd before fulfilling their downstream obligations should be renegotiated if they wish to retain the block.
LEADERSHIP gathered that Abura fields in the Niger Delta, originally operated by the Nigeria Petroleum Development Corporation (NDPC), a subsidiary of the NNPC, as OML 65, but later farmed out and given to the Chinese, is also being recommended to be handed over to the NPDC.
The NPDC had, during the public hearing in June this year, explained that the field was producing 850,000m bpd and had a developed resource in the area to the tune of $1.18 billion and an undeveloped value of $1.10bn, which brings the total value to $2.282 billion. But the last administration renamed it OPL 298 and gave it to the CNPC. It was in operation under the Abura fields as OML 65, renamed OPL 298 and given the CNPC after being converted to OPL.
One of the co-chairmen affirmed that "the committee is worried that some foreign oil companies used fictitious names to reflect foreign concerns and may have connived with some people in government and highly influential Nigerians and traditional rulers to claim choice oil blocks without following due process".
The committee listed the Abura fields as evidence of recklessness on the part of the previous administrations to sign away national wealth without following due process.
A top member of the committee who confirmed the story said OPL 321, 323 and others are surrounded by controversy and should be renegotiated by the authorities.
He said: "We discovered during the investigations that the companies used the downstream projects to get the blocks at giveaway prices and, at the end of the day, they have not even started feasibility studies while they have gone far in the oil blocks. The blocks were tied to the projects like East-West railway project, gas-fired power stations in Kaduna and Abuja Petroleum Greenfield Refineries. But not even an EIA has been signed in any of the projects. The NNPC which is to follow up the projects don't even know what is happening and could not offer us any tangible explanations on the state of the agreements and the projects. At the level of the chairmen, we have been meeting and as soon as we resume we will go through the report."
One of the co-chairmen said: "The committee has learnt a lot from the power probe report and would submit the first part of the report which dealt with the Department of Petroleum Resources (DPR), the Ministry of Petroleum and the award of oil blocks from 1999 to 2007. We will do that and then start with the NNPC and the companies involved in lifting crude and buying petroleum products from Nigeria. We will also look at the state of refineries in the country and the funds committed so far with or without result."
He added that "we have had a lot of material at our disposal that we have gone through and our consultants have almost rounded off. So we will submit the first material and then go on with the NNPC proper. We don't want to muddle it up by calling people for an issue when it is not yet time for them to explain."
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