The Department of Petroleum Resources (DPR) could not account for eight oil blocs out of the 77 offered in the 2005 bid round, nor could it account for the $2.6bn Signature Bonus realised during the bidding process, the House of Representatives ad-hoc committee investigating the Oil and Gas sector was told yesterday.
The committee also heard that an oil prospecting company, Messrs Addax Petroleum Limited offered a $35m bribe to some unnamed Nigerian official to secure Oil Prospecting License (OPL) in the 2005 oil bid round. Only $1.7bn of the $2.6 billion signature bonus for that bidding round was returned to the federal treasury, the committee also heard.
The report of unaccounted oil blocks and allegation of bribery and corruption during the 2005 bidding process marked the high point of submissions at the public hearing, as it was discovered that DPR bent the rules to favour some companies and disqualify others based on the same rules.
Chief Emefo Etudo, secretary and legal adviser to Starcrest Investment Ltd, in a petition to the committee, alleged that Messrs Addax Petroleum Limited was never a registered company in Nigeria or anywhere else around the globe, but they were offered OPL 291.
According to Etudo, Messrs Addax Petroleum Limited used a company, Chinese Petroleum Corporation, which was described in their application form number 329 and 330 as a “State-owned enterprise” with Taiwan ROC nationality, as well as one Mr. Chuka E. Offor, a Nigerian national of 5 Apejobi Crescent, Anthony Village, Lagos to share the said bribe.
“About ten persons, corporate institutions, powerful individuals in Nigeria and some of them foreigners connived among themselves and being in aid of $35 million provided by Addax Petroleum Development Company Limited, they were able to neutralise transparency and integrity as enshrined in the guideline for 2006 bid round as they were able to seize an oil bloc, a very important one, without Mr. President�s approval, the former President Olusegun Obasanjo.
“He did not approve in anyway whatsoever, directly or indirectly what they have done. They connived with Mr. Tony Chukwueke. I will give the facts and document to the committee. With some other people whom we don�t know their names, we have evidence of money and how this money went round. We have evidence that they committed these crimes by using the name of a company that was not incorporated either in Nigeria or abroad; they call it China Petroleum Corporation.
“They used that name to forward a bid to Nigeria, and that bid was a combined bid by so-called Chinese Petroleum Corporation (CPC) and one Starcrest Energy Limited. They forwarded that bid and it was a fraudulent misrepresentation and this undertaking came to DPR. DPR allowed the company that was not in existence in any part of the world to secure Presidential approval on the 9th of March 2006 and to bid in the so called bid of 2006.
“Because CPC was not in existence, two oil blocs; OPL226 and OPL 294 which they seized by virtue of their conduct was suspended. For months, nobody was coming up for those blocs. Then on August 6th, 2006, something dramatic was done by Mr. Tony Chukwueke with all due respect to his services to this nation.
“He wrote three letters; one directly to CPC offering them OPL 291. That same day, he directed Mr. Ajumoju to offer the same oil bloc, OPL 291 to another company, Starcrest Nigeria Energy limited. On that day, he still committed himself to get offer to another company that does not exist both in Nigeria and abroad. They were reversing names up and down.
“This time the company was called Starcrest Energy Nigeria limited. I will forward the first two letters he wrote to the committee. While this fraud was going on, the same master was Addax Petroleum. This is certified copy of CBN/accountant general account with JP Morgan, Chase Bank. It will show that on the 24th June 2006, Addax Petroleum paid $13.750 million in respect of OPL 291. They paid this money not withstanding that they did not bid in the 2006 bid round, not withstanding that Mr. Chukwueke had not written the three letters he wrote. But they had paid in the money in respect of a bloc they didn�t bid for, the bloc that is not associated with them. From 16th of august 2006, they started making payment on all the processing fees.
“The position is that, what really happened is that one Mr. Jean Claude Gandolf, who incidentally is the chairman of Addax Petroleum, was the brain behind the entire thing that happened. They were not involved either directly or indirectly in the bid round, but they have signed contract with him and is operating OPL291.
“What is painful is that they used $35million pumped from abroad. They sent this money to Emeka Offor�s account, the account of his company, Starcrest Nigeria Energy at Diamond Bank Plc. The company that helped them to circulate the money is called Blackberry Nigeria limited. The managing director is Ifeanyi Paddy Ekeh.
“What is painful about the whole matter is that at a stage, they hijacked the transaction. This money was circulated round in this country through that account and if you summon Diamond Bank to bring the statement of their account, you can now trace wherever this money went to and you will make your findings. Diamond Bank Port Harcourt, Blackberry Nigeria Limited and Ifeanyi Paddy Ekeh are the main people involved in the dispatch of the money under the instruction of Emeka Offor and Jean Claude Gandolph who supervised the whole transaction”, he added.
In the 2005 oil bid round, 77 oil blocs were offered with 383 applications received. 44 oil blocs were awarded but the DPR recorded only 36 with eight unaccounted for.
But Mr. Tony Chukwueke, the suspended Director of DPR said, “44 were actually awarded but the difference may be because the 8 blocs unaccounted for did not pay their signature bonuses. I plead that I be given until tomorrow to meet my people and sort out the differences.”
The committee also faulted the shortfall noticed in the expected income from signature bonuses for the year 2005.
Chukwueke was asked why government received only N1.7 billion out of the N2.6 billion collected. He said, “Of the 44 that were awarded, some blocs were defaulted. The winners did not pay the signature bonuses. This is the reason that the psc were not signed and tomorrow, I will put that on the list of what we will give to you so that you see all those that were awarded, the ones that were paid and the ones that were not.”
The issue of payment of signature bonus in Naira instead of Dollars as stipulated by DPR�s guidelines was also raised. According to the committee, some companies were allowed to pay signature bonus in Naira instead of Dollars as stipulated by the guidelines. Examples of companies that paid in Naira were Oando for blocs OPL 278 and 236 while Abbeycot and Coscharis paid for OPL 293 in Naira.
Committee asked Mr. Chukwueke to disclose the exchange rate used in converting the Dollars to Naira, who authorised the payment to be done in Naira and whether there was any authorisation to that effect in writing. Mr. Chukwueke admitted receiving signature bonus in Naira but on the issue of whether it was against guideline, he said that, “I received directive to that effect from the Accountant-General of the Federation.”
According to the committee, the company that won bloc 321 was named Equtor Exploration Nigeria 321 Limited. That company must have been registered under the name 321 for the specific purpose of giving it bloc 321. Committee frowned against the similarity in names of the company and the bloc it eventually won saying that “it must have been predetermined.”
Committee also questioned the rationale for disqualifying some companies that met up with bid guidelines while pre-qualifying and especially awarding juicy contracts to companies that did not even purchase application forms.
Mr Igo Aguma, Chairman of committee said, “We noticed the award of juicy blocs to separate companies that had just one director. In some cases, 2 or 3 or even 8 companies that bided for same blocs had the same directors, same promoters and same addresses”.