FG’s N59tr oil deal intact –NNPC

sunnewsonline.com

Senate has commenced investigation into an alleged illegal transfer of four oil blocks, amounting to of N58.9 trillion to four companies after five oil-producing communities from Delta State stormed the National Assembly in protest last week. The probe is against the backdrop of the dismissal ßthe Nigerian National Petroleum Corporation (NNPC) of the allegation by the Delta communities as flawed.

The NNPC insisted that the Federal Government had not ceded any oil block to any company. The five oil-producing communities protesting the illegal deal are: Itsekiri Ethnic Nationality (led by Chief Emami Ayiri); Ijaw Ethnic Nationality (Chief Aribogha Johnny); Urhobo Ethnic Nationality (led by Olorogun Jaro Egbo), Isoko Ethnic Nationality (led by Zino Onaemor); and Ndokwa Ethnic Nationality (led by Emmanuel Orwti).

Last week, the oil-producing communities accused the Petroleum Resources Minister, Diezani Alison-Madueke of having secretly transferred production rights in four large oil blocks (OMLs 26, 30, 34, and 42) to Atlantic Energy Drilling Concept Limited allegedly owned by Mr. Jide Omokore. But the NNPC has refuted the allegations insisting that the Strategic Alliance Award referred to by the oil communities was only a financial arrangement between the NNPC and Atlantic Energy Drilling Concepts Limited.

The Senate probe is coming a week after the oil-communities alleged that Petroleum Minister, Diezani Alison-Madueke and Shell Petroleum Development Company (SPDC) Limited by-passed due process in the deal. Responding to a summons from the Senate Committee on Petroleum Resources (Upstream), the Nigerian National Petroleum Corporation (NNPC) said the oil-communities were crying wolf; that no N59 trillion is missing from the oil deal.

In his response to the Senate committee’s query, NNPC’s Group Managing Director, Mr. Andrew Yakubu, stated that the deal neither violated the Public Procurement Act nor denied government of ownership of the oil blocks. “The Strategic Alliance Agreement entered into between Nigerian Petroleum Development Company Limited and Atlantic Energy Drilling Concept Limited, was not a divestment of Assets nor transfer of operatorship, but simply an alternative funding arrangement in order to meet the Nigerian Petroleum Development Company Limited’s cash call obligations in the affected OMLs…

“There has been no award of a block during the entire exercise not to talk about discretionary award,” the statement submitted by the NNPC further indicated. The NNPC cleared Atlantic Energy Drilling Concept Limited of any wrongdoing and insisted that the Strategic Alliance Agreement entered into with the company, ensured that the NNPC received funds to finance its 55 % equity interests in the affects oil blocks.

NNPC further told the Senate committee that contrary to the allegations by the oil-producing communities, “the Strategic Alliance Agreement does not amount to a bidding process for the allocation of oil blocks and that the Agreement is in furtherance of funding cash call obligations from alternative sources.”

The submission listed alternative sources of funding currently being used in the oil sector as including service contracts, production sharing contracts and alternative funding arrangements being used in the Traditional Joint Venture operations.

“It is instructive to note that the Nigerian Petroleum Development Company Limited (NPDC) is still the operator and still owns 55% interest in the OMLs. The company has not divested any of its interests in the OMLs as erroneously alleged by the petitioners,” the NNPC stated. The NNPC GMD also stated that contrary to claims that the transaction contravened the Public Procurement Act, the NNPC through the Strategic Alliance Agreement gets, funding for its equity interests and that the organisation is not involved in any form of procurement of goods and services as envisaged in the Act.