• Friday, June 14, 2024
businessday logo


Updated: Kachikwu says $13.5bn ZabaZaba oil field will go on despite Malabu rift

Emmanuel Kachikwu, Minister of Petroleum Resources, has assured that whatever happens, the $13.5 billion Zabazaba deepwater project and other projects that are associated with the Malabu oil bloc or OPL 245 would  be executed.

Kachikwu however said that the Malabu issue continues to be a source of worry and it happened before this administration and  it is also in court. “For those who do not know, it has to do with allegations of one billion dollars illegally being paid in a private payment by some officials, both Nigerians and non Nigerians, to consummate the transactions.

This issue is being handled by various bodies in Nigeria, with actions going on in France as well as in other countries that are involved. The fact are there, my training as a lawyer is that I try not to comment on issues that are in court but wait and see what the facts are. But there is a difference between recovery and dealing with the benefits of the bloc itself”.

He said: “The Zabazaba and whatever projects that have been signed on to it will have to be executed. They have nothing to do with the recovery of the money. I believe we should keep trailing the money and get it. Once there is a question mark regarding the transaction you did, historically you need to come clean to the table. If there is one billion dollars paid illegally to some individuals, instead of paying to the government, that money should be recovered. In the next coming months, we are going to be sitting down, different from what the EFCC is doing, to say we need to talk.”

The  minister who was  responding  to questions on the fate of the  projects associated with Malabu oil bloc because of  the  controversy  surrounding the  asset,  during the ongoing  Offshore Technology Conference , holding in Houston,Texas, United States of America, said: “ There are huge billions of investments in Nigeria, so I’m not going to shut that down. But if in fact there are question marks coming apparently from all the data that we have seen, we need to sit down and ask questions, ‘there is a one billion dollars lying down there, probably with the wrong person, we need to sit down and discuss how we  can recover that one billion dollars. And therefore give you a clean bill of health”.

 He said obviously, the issue of criminality is a different thing altogether. That’s outside  his realm but  are being handled by those in the best position to handle that. “My realm is to make sure investment goes ahead. We are not happy with what happened but if we should be able to recover the money without casting aspersions because I don’t have the data”.

Asked to comment on the status of the MoU signed with  China  and India, Kachikwu said  $79 billion  was raised via an MoU  from  the Chinese, adding  that the essence of the MoU is that should in case they are interested to work with us, we need to identify the projects because those projects are locked up in NNPC and NNPC have to be willing  say we need funding for that project line or gas infrastructural line.

“We have a lot of them.We need  to identify what sort of pipeline we need to build. So we need to identify a project to sell. Some of those projects require you sit with investors. There are short term monies available, some of them like $5 billion disbursement, we are working on how to be able to access those fund. If it will take you an average of one to two years to sign an MOU, we will not sit back. When I transited fully into the ministry, there was a bit of a gap that needs to catch up.

“If I get 20 per cent of the $5 billion pledged, I would have generated $20 billion into the system. We are still optimistic because there is still time frame and we are working on it. China is working on railroads, power and other infrastructure and the money is coming from same source”.

On crude over lift, the  Minister said the figures he has are  between $5-$6 billion and $10 billion but that over-lift is a bit more technical.

The claims of the IOCs he said  are rising from interpretation disputes. “NNPC are saying our position is that you needed to have gotten an approval before you lift ‘X’, oil companies say under the terms of the contracts we have, we don’t need your approval to lift ‘X’.  They have gone up to international tribunals, they have close to about $6 billion in terms of award and NNPC had the right to challenge them in a local court on the basis of an issue”.

 On the issue of Production Sharing Contract(PSC), he said he  has already given guidelines about how it could be resolved, just as  he gave guidelines about the cash calls

“My position is that firstly, it must be on the basis of no victor, no vanquished. This means that if I do that today and slashed that $6billion to about $2-$3billion, and I would say how do we spread it and I find resources for that. IOCs have to consider that that’s a way of paying, rather than arguing in court. So, just like the JVs, I’m working on, it’s going to take awhile. However, now that we have created credibility on the JVs, I wouldn’t want to take both at the same time. Now that we have dealt with one, hopefully we can deal with the second.