28 May 2014

Nigeria: Reps Probe Shell, Diezani Over Sale of OML 29

The House of Representatives yesterday resolved to investigate an oil giant, Shell Petroleum Development Company (SPDC) and the Minister of Petroleum, Mrs Diezani Alison-Madueke over the alleged illegal sale of an Oil Mining Licence (OML 29).

It was alleged during the House plenary that Shell and other oil majors may have hidden under the cover of waivers usually granted by Mrs Alison-Madueke to embark on the sale of OML 29 and others.

The lawmakers reported that OML 29 has been in the custody of Shell for more than 52 years and one-half of the area of lease has not been relinquished to the federal government as stipulated by the Petroleum Act.

Item 12(1) of the First Schedule to the Petroleum Act stipulates that 10 years after the grant of an oil mining lease, one-half of lease shall be relinquished to the federal government.

The development was a fallout of a motion sponsored by Hon. Irona Alphonsus Gerald on "Inadvertent Sale of OML 29 and other OMLS by SPDC and other Oil Majors".

Gerald had in lead debate, told lawmakers during yesterday's plenary that "the outright sale of OML 29 and other OMLS is in direct contravention of the (Petroleum) Act and undermines the national interest".

The Speaker, Aminu Waziri Tambuwal was yet to announce the composition of the Ad-hoc Committee detailed to investigate and establish the validity of the transactions.

When constituted, the Ad-hoc Committee is to report back to the House within two weeks.

Last June, Shell announced plans to sell four more onshore oil blocks in Nigeria in its latest divestment from the country.

According to monitored reports, the blocks, with a combined production of around 70,000 barrels per day (bpd), are oil mining licences (OMLs) 18, 24, 25 and 29, located in the Niger Delta.

The oil giant stated that it would consult with its international and Nigerian partners over the future of the 28 leases that produce some 750,000 barrels of oil per day.

Shell has already sold eight Niger Delta licences for a total $1.8 billion since 2010.

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