Baru lands in more troubled waters over illegal oil contract deals

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The Group Managing Director of Nigerian National Petroleum Corporation (NNPC), Maikanti Baru, is set to have a date with the Senate over allegations that he was involved in an illegal revocation of an Oil Mining Licence and re-awarding of same to another company without due process.

Baru was in a petition sent to the Senate Committee on Ethics and Privileges accused of playing a prominent role in the revocation of Oil Mining Licence (OML 13) and its subsequent re-award to the Nigerian Petroleum Development Company, a subsidiary of NNPC by executive fiat.

The Senate has also summoned the Management of Shell Petroleum Development Company of Nigeria limited, (SPDC) over its involvement in the same matter.

In issuing the summons, the Senate Committee on Ethics which is carrying out the investigation declared on Monday that it had become imperative to carry out a holistic investigation into the revocation as Nigeria could not afford another Malibu OPL 245 scandal as the country struggles to navigate away from recession.

Speaking during its meeting at the National Assembly, Chairman of the Committee, Senator Samuel Anyanwu, said a petition by the National Coordinator, Global Peace and Sustainability Network, Chief Longers Anyanwu, on the matter would be thoroughly considered.

He also lamented that the Management of SPDC had failed to honour the committee’s invitation three times in the past, and thereafter threatened that the committee would not hesitate to issue a warrant of arrest on the SPDC officials if they fail to appear before the Senate Committee this time.

Earlier in his presentation, National Coordinator of Global Peace and Sustainability Network, Chief Longers Anyanwu, explained that OML 13 is an onshore oil block on the Eastern Niger Delta and has an acreage of 1,923Sq.m, just as it hosts the Utapate South and Ibibio fields as well as a string of producing marginal fields, including the Frontier oil-operated Uquo, a gas accumulation and the 2,000BOPD Qua Iboe.

The petitioner asked the Senate committee to conduct thorough investigation of the OML 13 transaction from the point when SPDC was divested of its interest in the Lease to the present, particularly, the period following the award of the Lease to NPDC and its subsequent assignment or Farm Out (whichever is applicable) to Sterling Oil Exploration and Energy Production Company (SEEPCO).

It also requested “that all the participants in this shoddy deal be identified, investigated, prosecuted and severely punished according to the law as their conduct, actions and inactions amount to economic sabotage on the Government and people of Nigeria.”

According to the petitioner, the OML 13 has a total number of thirty-nine oil wells, with a production capacity of about 33,500 barrels of oil equivalent per day, adding that it is made up of Oil Prospecting Licence (OPL) 2001, 2002 and 2003, and formerly operated by Shell Petroleum Development Company of Nigeria Limited, SPDC, it was revoked along with other blocks in 2005.

“OML 13 was offered in the 2007 Licencing Rounds where Jahcon International Limited won OPL 2091, Hi Rev Exploration and Production won OPL 2002 while Oil and Industrial Services Ltd won OPL 2003, with commitments to pay signature bonuses of $46million’ $66 million abs $34 million respectively.

The petition reads in parts:

“The said OML 13 was sometime between February and Mach 2016, revoked and awarded to Nigerian Petroleum Development Company, a subsidiary and the production arm of the Nigerian National Petroleum Corporation, (NNPC) through executive fiat and without going through the statutory Licencing Bids Rounds.

“Curiously, this OML 13 which was awarded to the NPDC through an executive fiat has been re-awarded to Sterling Oil Exploration and Energy Production Company (SEEPCO) without as much as this offer going through an open tender abs the advertisement of a Licencing Bids Round by the relevant authorities.

“From our investigation, we are able to establish that NPDC and SEEPCO could not produce evidence of fair play either in the award of OML 13 or, in the unlikely circumstance, in the award of a contract of Farm Out Farm In by the NPDC to SEEPCO as stipulated by the extant Nigerian laws regulating operations in the oil and gas industry and the Public Procurement Act which regulates the activities of agencies defined in the Act as procuring agents.”

Longers Anyanwu who called for outright cancellation and a reversal of the entire process, said “it was shrouded in fraudulent and corrupt processes and never complied with the laid-down procedure contained in the extant Laws, Regulations and Guidelines established for operations in the oil and gas industry.

He said that “Nigerians demand to see that compliance with due advertisement is made for the Farm Out of OML 13. Particularly, Nigerians would want to see transparent evidence of the process which shall include: Submission of application by interested companies; Payment of the required application, processing and other fees into the stipulated accounts of the Federal Government of Nigeria; Pre qualification of interested companies; Detailed evidence of announcement of the prequalified companies and Evidence of detailed technical and commercial bids by prequalified companies; Evaluation and announcements of winning bids.”

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