Reps tackle DPR over $566m outstanding signature bonus since 2005

House of Representatives Ad hoc Committee investigating the allocation of on oil prospecting licences (OPLs) and oil mining leases (OMLs) on Wednesday, expressed concern over the non-payment of $565,870,250 being outstanding signature bonuses between 2005 and 2007.

The Committee, chaired by Gideon Gwani, also expressed displeasure over various infractions in the allocation of the oil blocs, identity of the beneficiaries/winners of the oil blocs and indiscriminate transfer of oil blocs to companies that did not participate in the award process.

The documents presented by Sunday Babalola, head, Basinal Assessment and Lease Administration, who spoke on behalf of Department of Petroleum Resources (DPR) and obtained by BusinessDay, showed that $764,958,167 was paid out of a total sum of $1,020,078,167 signature bonus offered, leaving the balance of $255,120,000 for the 2005 licensing round.

Out of the total sum of $654,040,000 signature bonus offered, the sum of $418,530,000 was paid, leaving the balance of $155,000,000 for year 2006 licensing round.

From the total sum of $817,052,500 offered in the 2007 licensing round, the sum of $491,302,250 was paid, leaving the balance of $105,750,250 yet unpaid by the beneficiaries.

Babalola also denied knowledge of the beneficiaries/winners of the oil blocs, and disclosed plans to conduct search at Corporate Affairs Commission (CAC) on the true identity of some of the beneficiaries.

On his part, Victor Nwokolo, chairman, House Committee on Petroleum Resources (Upstream), decried the sudden reallocation of oil blocs worth $210 million, which was cancelled through Presidential directive for paying $21 million, but was relocated to Stallion Global after payment $55 million without following due process.

While reacting to the presentation of the DPR representative, queried the unilateral decision of DPR to usurp the Presidential directive for the cancellation of 25 oil blocs non-fully paid for and unpaid for as contained in a letter dated 20th January 2006.

Former President Olusegun Obasanjo had in response to the letter written by ex-Minister of State for Petroleum Resources, approved the cancellation of the allocated oil blocs which failed to meet the pre-qualification requirements.

According to Gideon Gwani, chairman of the Adhoc Committee, the reallocated oil blocs which were paid for after the cancellation include: OPL 276 and 283, OPL 236 (Oando), OPL 282 (NAOC), OPL 315 but later paid $172.8 million out of $180 million, OPL 135 (Agip), OPL 280 (Stallion Global) among others.

On her part, Jemila Suara, Permanent Secretary of Federal Ministry of Petroleum Resources who expressed shock over the development, assured that necessary measures will be out in place to entrench accountability and transparency in the oil blocs allocation.

She assured that the information from the ongoing Investigative public hearing will guide the Ministry at the scheduled meeting with stakeholders including NNPC and DPR to rejig the policies guiding the award process and help in avoiding banana peels.

While ruling, the Committee summoned Ibe Kachukwu, minister of state for petroleum resources; Diezani Allison-Madueke, former minister of petroleum, and King Edmund Maduabebe Daukoru of Nembe Kingdom, a former NNPC group managing director, to explain their role in the allocation of oil blocs.

While speaking, Funso Kupolokun, former NNPC group managing director, decried the arbitrary powers conferred on the minister to adopt discretionary powers in the allocation of oil blocs.

In the bid to sanitise the process, Kupolokun emphasised the need to streamline how oil blocs were awarded, stressing that the process as done previously was complicated.