A company owned by a daughter of former President
Olusegun Obasanjo is among the beneficiaries of the Federal Government’s
recent secret allocations of prize oil blocks, Daily Trust
investigations show.
Findings reveal that All Grace Energy, in
which Senator Iyabo Obasanjo-Bello has majority stake, got the oil block
Ubima Creek field OML 17 in a discretional process without competitive
bidding.
Some oil companies and industry experts said the secret allocations are against international best practices.
Daily
Trust learnt that the secret allocations were done over the past one
year, even though government had said the process of awarding oil
licences were to be executed publicly through competitive bidding.
A newspaper report recently said All Grace Energy is among companies that benefitted from the deals.
Records
made available to Daily Trust by the Corporate Affairs Commission (CAC)
revealed that Iyabo Obasanjo-Bello is the major shareholder of All
Grace Energy, which was registered on July 12, 2006 with N30 million
share capital.
Mrs Obasanjo-Bello has six million shares,
followed by other directors/shareholders: Abe Magnus Ngei (2 million),
Mrs Abiri Dorcas (3 million), Dr. Adenikinju Adeola (3 million), Ugbeya
Donatus (1 million), Alabi Yekini (1 million) and Alhaji Abubakar
Abdullahi (1 million).
The company was registered “to operate
marginal fields for the purpose of producing petroleum, natural gas,
liquefied petroleum gas etc,” and has filed annual returns only up to
2007, according to CAC records.
Apparently reacting to the recent
report that oil blocks were awarded illegally, Director of the
Department of Petroleum Resources, Mr. Osten Olorunsola, said at a
conference in Houston, United States, that the president is empowered by
law to make such allocations.
This development flies in the face
of the Federal Government’s consistent pledges to conduct fresh oil bid
round. The last public oil bid was conducted during President Olusegun
Obasanjo’s regime.
In 2010, for instance, Petroleum Minister
Diezani Alison-Madueke said government was trying to “sort out some
issues” surrounding the previous bid rounds before it starts fresh ones.
Instead,
the government apparently resorted to secret allocation of choice oil
blocks to companies belonging to cronies, family members and associates,
industry analysts say.
A player in the oil industry, who craved
for anonymity, told Daily Trust the government’s action would discourage
competition among indigenous oil operators and also send wrong signals
to international investors.
A source at DPR said that the process
of awarding the oil blocks to Iyabo actually started during Obasanjo’s
administration but “a disagreement between Shell and DPR over the area
to farm-out couldn’t be reached until recently when the Malabu oil block
deal was sealed between the Federal Government and the multinationals.”
Oil block deal conditions not met
When
our reporter contacted the spokesperson for the DPR, Mrs Belema
Osibodu, she did not confirm or deny that Iyabo’s company was given the
oil block but said the marginal fields were awarded based on some
conditions.
She said the conditions included the
development/execution of a public private partnership (PPP) model for
three pilot projects under the small scale gas utilisation scheme.
Under
this arrangement, Osibodu said, a gas-fired power plant of not less
than 5mw shall be dedicated to supply electricity to Ubima community of
Rivers State; an LPG extraction plant shall be installed as part of gas
processing facility; and a part of the produced liquefied petroleum gas
shall be designated for domestic use and support of small scale industry
in the community.
But when a Daily Trust reporter visited Ubima
community in Ikwerre local government area, there was no indication that
such project was being executed. The community happens to be the
country home of Governor Rotimi Amaechi.
The chairman of Ubima
community, Elder Daniel Anwuzurike, told Daily Trust that the community
has been living without electricity supply for the past three months.
Anwuzurike said he was not aware of any power project going on in the Ubima community.
‘Secret oil block deals going on for long’
The
controversial oil field is considered under “marginal oil fields” which
the Petroleum Act (Amended) 1996 defines as “such field as the
President may, from time to time, identify as a marginal field.”
The
law provides that the holder of an OML can farm out (lease out) any
marginal field which lies within the Oil Mining Lease (OML).
Also,
the president may cause the farm-out of a marginal field which has been
left unattended for a period of not less than 10 years from the date of
the first discovery of the marginal field.
Reverend David
Ugolor, Executive Director, African Network for Environment and Economic
Justice (ANEEJ), said this was not the first time such secret
allocation of oil blocks was done by a president.
“In any case,
the development contravenes global best practice of open competitive
bidding and as such should be discouraged,” Ugolor said. “Nigerians are
also kept in the dark as to how much accrued to the country from the
exercise. The unresolved regulatory issues has not allowed potential
investors, both local and international, to make huge financial
commitment in the sector. Nigeria is losing huge resources from the
dwindling investment in the sector and there is also loss of potential
revenue from royalties,” he added.
Ifeayi Izeze, an Abuja-based
consultant on strategy and communication, said the controversies
surrounding the delay in passage of the Petroleum Industry Reform Bill
(PIB) could be blamed for the delay/shifting date for the 2012 oil bloc
bid round.
When Daily Trust contacted the spokesman for the
Nigerian Extractive Industry Transparency Initiative (NEITI), Mr Orji
Ogbonnaya Orji, he said it is not the responsibility of NEITI to decide
how oil bid rounds will be conducted.
He however added that NEITI expects to be invited to observe the process in line with provisions of the law.
