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Reps track unpaid $402m oil money

Posted by From JAMES OJO, Abuja on 2008/08/05 | Views: 609 |

Reps track unpaid $402m oil money


The House of Representatives ad-committee probing the activities of the Nigerian National Petroleum Corporation (NNPC) and its subsidiaries on Tuesday discovered the $402 million revenue earlier declared lost as outstanding fees from the bid for oil blocks in 2000 alone.

The House of Representatives ad-committee probing the activities of the Nigerian National Petroleum Corporation (NNPC) and its subsidiaries on Tuesday discovered the $402 million revenue earlier declared lost as outstanding fees from the bid for oil blocks in 2000 alone.

Of the amount that was declared missing, Shell Nigeria Exploration Petroleum Company [SNEPCO] was credited to have declined payment of the balance for OPL 250 that was offered for $200 million, after it failed to strike oil. It had earlier paid $75 million as signature bonus. The balance of the $402 million was the outstanding fees that most of the companies that won the bid failed to pay DPR.
But the immediate past Group Managing Director of NNPC, Mr Funso Kupolokun disagreed with the probe committee that the money on the 2000 bid rounds had not been located.

Testifying before the committee, Kupolokun said that 'collection of money is a DPR affair. After the bid rounds, the PSC agreements were being negotiated. Virtually all the companies did pay, but a few did not. I am not in charge of collecting the money, so, I could not say much about it," he said.
Adding to the puzzle on the unpaid fees was DPR Accountant, Moses Olaniyi, who interjected that 'he needs a record of those that won and those that did not, to be able to get the accurate figure."
However, Kupolokun explained that the minimum amount placed on OPL250 was $200 million, which SNEPCO bidded for and won.

'SNEPCO won the bid and negotiation started and everybody was asked to pay 35 per cent of the signature bonus. The signing was done in November 2001, but it has been terminated because after drilling, they were not successful.

Kupolokun agreed that mistakes were made by allowing companies to tender without agreeing on the PSC, which, he said, made the whole exercise sticky and it took one and a half years to resolve.
" We had to adopt the Profit Oil and asked that they stagger the payment," he said.
But from our own analysis in the year 2000 only $5 million was collected and in four years since that round only $222 million has been collected out of the $628 expected.

Taking into cognisance the OPL 250 that has been stopped Nigeria still has an outstanding debt of $248 million yet to be paid in 2008."

The committee reminded Kupolokun that his action caused Nigeria to lose $125 million after he agreed that the payment should be staggered and allowed SNEPCO to pay only 35 per cent. We are still losing $228 million from that bid, 'the committee lamented.
The former NNPC boss, however, disclosed that the guideline used by the DPR in sharing oil blocs was written by the Presidency.

Some of the juicy oil blocks, including OPL 256, 250 went to companies floated by top government officials under the administration of Chief Olusegun Obasanjo.
Kupolokun had served as special assistant to the president on petroleum matters before being seconded to head the NNPC.

As special assistant to the president, he said that the president always gave him job descriptions, although admitting that the Petroleum Act did not include him as minister, but that he could assist the minister.

'The minister then was the president . He appointed me as the special assistant to the president. I advise the president and the presidential adviser to the president."
On whether he had approvals from the president that he passed to the DPR, Kupolokun said ' He gives me instructions either verbally or written. There is no instruction that I pass to the DPR that I don't have a valid approval of Mr. president.

He also agreed with the committee that his office then was not created by Constitution." I don't have access to the files now. I did hand over to Alhaji Kpaki, but not the approvals that I got from Mr President. If I check my archives, 80 per cent of the files I have all the documents.
'There was no action that I took that did not have the approval of the president, I did not rely on the rankings done by the DPR to award the blocks. In block 214, where Chevron won, the same Chevron won in block 250.

' If they won these and Esso Exploration has not won any ,we rather spread it out.
If one person won three blocks, he may not have money to develop the fields. We did not put in the guidelines and the guidelines are guided."

'I stand by the actions that we have taken and I stand by it that what we did was in good faith. The taste of the pudding is also in the eating. I am not aware that any operator complained about the operations," he added.

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