Former Group Managing Director (GMD) of
the Nigerian National Petroleum Corporation (NNPC) Funsho Kupolokun has
described the process of awarding Oil Prospecting Licences (OPL) and
Oil Mining Mining Leases (OML) as faulty.
Kupolokun appeared before the House of
Representatives Ad hoc Committee investigating the award of the licences
and leases yesterday.
He noted that the process must be cleaned up if the country intends to get maximum result from it.
Kupolokun, who ran the NNPC during the
administration of former President Olusegun Obasanjo, denied involvement
in the award of OMLs and OPLs during his tenure as GMD.
He said:”The process of 2006 round of
bidding was complex, which made us to get less than what we could have
gotten, especially on strategic projects.
We thought what we did was the right thing but there are areas and issues that we now see went wrong.
Even the competitive bidding where we
invited prominent, credible people from all parts of the country, in a
bid to make it transparent was still wrong because we see people even in
the same room fighting even up till now.
“There is a need to clean up the process and make it transparent and better than the past.”
The Gideon Gwani-led ad hoc Committee
faulted the Department of Petroleum Resources (DPR) for jettisoning due
process by awarding some licences and leases far less than approved
prices.
Also, the committee said documents at
its disposal show that DPR abused relinquishment of licence and leases
by operating companies.
The committee noted that a 20th January
2006 letter by the then Minister of State (Petroleum Resources), Edmond
Daukoru to the then President Olusegun Obasanjo stated that of 44 oil
blocks that were won in 2005, 19 were fully paid for, 18 partially
committed and 17 attracted no payment.
The then President directed that the 25
that attracted partial and no commitments should be cancelled and listed
for next round, the committee said.
The committe disclosed that curiously 13 oil companies made payments after the presidential directive.
The committee also inquired from DPR the
source of the approval for two extra licences, in addition to the
preferential treatment for some companies over payment for the licence
and leases.
The committee cited the official price
for a licence put at $210m for a signature bonus which was rejected
because the winner could only pay $21m.
The committee asked for reason for
sellng the same oil block at 75 per cent discount for $57m and
accepting $55m for it from another company.
Responding on behalf of DPR, Head,
Basinal Assessment and Lease Administration, Sunday Babalola, said due
process was not breached in the award of the oil blocks.
He said from year 2000, awards of oil blocks were done through competitive bidding, especially between 2005 and 2007 .
He also denied that six companies that did not participate in the bidding process were awarded oil blocks.
According to him, the oil blocks were won by consurtium of companies which included the names quoted by the lawmakers.
On relinquishment of licences and leases
after expiration, Babalola said the DPR was in negotiation with
affected companies, adding that the licenses and leases could not be
withdrawn without negotiation due to the investment put in by the
affected companies.
He said there were 31 oil blocks due for
relinquishment out of which 16 belonged to NNPC that can not be
relinquished, as stipulated by law.
“We don’t just cut the leases because they have invested. We are on this for about one and half year now,” he added.
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