38 unregistered firms won oil blocks ’

More facts have emerged that 38 oil companies that were not registered for the 2005 bid rounds won interests in 23 oil blocks during the exercise.

A report by the House of Representatives ad hoc committee that probed the oil sector from 1999 to 2007 showed that $2,629,275,667 was realised as signature bonus through the sale of 36 oil blocks during the bid rounds.

The report also recommended that the Korea National Oil Company be made to pay the Federal Government $231m, being the purported discount for OPL 321 and 323, which it won during the exercise.

The total signature bonus KNOC paid for the two oil blocks was $255m.

The report said, “KNOC made a misleading presentation to the ad hoc committee concerning the issue of signature bonus. First, KNOC claimed that it received a discount of $231m on the payment of signature bonus.

“There is no evidential confirmation of this fact. Not a single document was presented in support of this assertion.”

Stressing the untidiness in the bid rounds, the committee said while the KNOC believed it did not have to pay the $231m, the Department of Petroleum Resources’ record on signature bonus payments “falsely signifies that KNOC has paid this sum.”

The discount claimed by the Korean firm was based on the purported attachment of strategic downstream investments to the blocks.

“OPLs 321 and 323 were awarded to Korea National Oil Company based on a doubtful right of first refusal attached to the said blocks,” the committee said.

It added that table one (paragraph 1.8) of its report show that deep offshore blocks 321 and 323 were not among the blocks attached to strategic downstream projects; and over which a right of first refusal existed.

“There is no evidence to suggest that any strategic downstream project is attached to any deep shore block in the 2005 bid round.”

According to the report, the 38 oil companies that did not register for the 2005 bid rounds evaded the statutory payment of $10,000 application fees and $10,000 for processing.

The committee, therefore, directed that the debts should be recovered.

Besides, the application forms of about 11 companies that won oil blocks during the bid rounds were missing from DPR records.

The 57-page report was submitted to the House of Representatives before it proceeded on Christmas break.

Its general recommendations, published exclusively in November by THE PUNCH, had criticised former President Olusegun Obasanjo for acting as the minister of petroleum, contrary to Section 138 of the 1999 Constitution.

Further details in the report showed that about 120 forms were missing in the compendium of application forms presented to the committee from 2000 to 2007 bid rounds.

The missing application forms are “001, 003-005, 006-008, 013-014, 019, 021-022, 029, 035-036, 038-039, 043,045, 048-050, 051,055,057, 060, 062, 065, 069-080,081, 084, 087,094-096.

Others are “100, 104, 177, 199, 120-122, 126,127-131, 133, 141, 143-146, 151, 153-158, 163, 166-168, 173-174, 180-182, 188, 190, 192, 196, 198-202, 204-206, 211-212, 216-219, 221, 224, 230, 238, 241, 243, 248-251, 253, 259-260, 263-264, 268-269,271, 273, 275-276.

Also missing in the compendium are “278, 280-281, 284, 287, 289, 290-291, 293-296, 299-303, 313-314, 319, 322-327, 328, 332, 335-337, 342-346, 348, 355, 360, 365, 370-372, 375-377, 380-381 and all forms after 381 such as Midland Petroleum Limited’s Form No. 385.”

The committee said, “The absence of these forms from the said compendium immediately questions its integrity.

“What is established is that companies that did not register for the bid process were pre-qualified, and eventually awarded blocks in clear violation of both the Internal Memorandum and the Guidelines.

“Moreover, participation in a bid process is de facto, an application for Oil Prospecting Licence.

“The non-registration of these 38 companies and their non-payment of the statutory application and processing fees of $10,000 each totaling $20,000 per applicant, were therefore, a clear violation of paragraph 59 (a) and (b) of the Petroleum (Drilling and Production) Regulations.

On the March 12, 2003 bid round for OPLs 223, 251 and 257, the panel said there was no evidence of ministerial approval for the exercise. It blamed a presidential aide for being its mastermind.

The committee also alleged that Elf Petroleum Nigeria Limited, which participated in the exercise, won OPL 223 in questionable circumstances. It consequently advised that Elf should be directed to pay $5m outstanding signature bonus on the block.

The Bid Evaluation Committee of 2003 had fixed $20m as signature bonus on the block, but the company got a staggered payment schedule of $15m.

Exxon Mobil, Vintage Oil and Gas Limited and ECL were other companies that participated in the bid on invitation by the said presidential aide.

“The parameters of the invitation and the circumstances of the invitation are shrouded in mystery,” the report stated.

The report added that OPL 223 was awarded on April 29, 2003 to Elf and not on March 12 day of the bid for the exercise.

It said the circumstances in which Elf that had not been awarded OPL 223 on March 12, 2003 came to be awarded the same block six weeks later on April 29, 2003 was suspicious.

“It is all the more suspicious when this latter award is juxtaposed against the fact that its partner on the block is NPDC, a subsidiary of NNPC,” the committee said.

An exclusive report by THE PUNCH on November 17 had indicated that about N134bn or ($1.148bn) staggered signature bonuses were outstanding
source:the punch neswpaper