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Published On: Thu, Jul 19th, 2018

Nigeria loses $10bn to shady oil deal – Senate

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By Ikechukwu Okaforadi and Musa Adamu

The Senate yesterday alleged that the federal government is losing over $10 billion to shady oil well lease renewal deal, which it claimed the Minister of State for Petroleum Resources, Ibe Kachikwu, and the Director, Department of Petroleum Resources (DPR), Mordecai Ladan, are perpetrating through some irregularities in the processes.
To this end, the Senate directed its Committee on Petroleum Resources (Upstream) to invite the Minister and the Director of DPR for questioning, with a view to investigating the fraud allegation and report back to the Senate, especially on how to correct it.
These resolutions of the Senate were sequel to a motion with the title: “Irregularities in the ongoing oil and gas lease renewal and massive loss of government revenue”, which was sponsored by the chairman of Senate Committee on Petroleum Resources (Upstream), Omotayo Alasoadura (APC Ondo Central) and three others.
Leading debate on the motion, Alasoadura, claimed that the loss was following irregularities in oil lease renewal deal which saw the Minister granting illegal discounts and rebates in the deal process.
He said the DPR “has willfully and deliberately refused to provide the Senate Committee on Petroleum Resources Upstream with relevant information and data related in the ongoing lease renewal”.
Further disclosing that the committee had since December 2017 been inundated with plethora of petitions and complaints from stakeholders, Alasoadura added that his committee further observed that there were multiplicity of irregularities surrounding the ongoing renewal of oil and gas leases being undertaken by the minister and DPR.
“He is granting all manners of illegal discounts and rebates in the process of the ongoing renewal of the leases, and this is capable of shortchanging the country and denying the Federation the appropriate revenue accruable from the renewal of the said leases.
“The minister is proceeding to renew leases of companies that have brazenly and illegally refused to pay royalties due to government from oil and gas lifted by the said companies in contravention of extant laws,” he added.
He noted that under the provision of extant laws, failure to pay royalties is a ground for revocation of leases and a legal barrier to renewal of applicable leases.
The lawmaker further informed the Senate that there is a subsisting legal framework and due process mandated by extant law for the renewal of leases that are due for renewal and, therefore, wondered why the minister and DPR “have deliberately, willfully and brazenly decided to depart from subsisting legal framework and due process”.
Contributing, Senator Shehu Sani (APC Kaduna Central) said the motion was an indication of the rot in the oil and gas industry, pointing out that $10billion is huge revenue that the country could not afford to lose.
“From the substance of this motion, it is very clear that the Minister of State has in every possible way been engaged in acts that contravene the law. Over a year ago, he wrote an open letter raising issues about transparency and impunity in the oil sector.
“The issue of lease is something that has been on the front burner of national discourse in the last few weeks; and what this parliament can do is to, once and for all, bring the Minister to make a clarification of the actions he has taken as $10billion is no small amount of money. I am of the belief that if we can get to the root of this matter, it will also open other cans of worms.”
Also, Senator Rafiu Ibrahim (APC Kwara South) said: “The only observation I have on this motion is that, for the fact that Mr. President is the Minister of Petroleum Resources, maybe that is why this motion is not mentioning the Minister of Petroleum Resources. But we are aware that the Minister of State ordinarily does not have the final approval for this type of case. There is a board of NNPC, the ministry and it is out there – though it has yet to be substantiated – that the Chief of Staff to the President is a member of the board and is literally in charge of the board and the ministry.
“I will just want the prayer to expand those to be called in the investigation. It is in the rumour mill that the Chief of Staff is in charge of the NNPC and the Ministry of Petroleum Resources, so that the minister cannot just come and say he is not the one in charge.
“In our law, there is no space for ‘Minister of State,’ so a minister of state cannot give a final approval”.
While ruling on the motion, the Deputy Senate president, Ike Ekweremadu, who presided over the plenary, asked the Committee on Petroleum Resources (Upstream) to thoroughly investigate all issues bordering on the oil and gas leases renewal before the planned public hearing on the matter.
He emphasized on the need for proper oversight by the committee, saying “what matters most in cases like this is transparency in our oversight functions”.
He charged all the government regulatory and enforcement agencies to always discharge their duties in such a manner to ensure transparency in governance irrespective of those involved.

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