IN a bid to clear the air on speculations and counter speculations over the handling of investigations into the conduct of the 2007 oil and gas blocks licensing round, the Federal Government has ordered the Director of the Department of Petroleum Resources (DPR) to proceed on an indefinite leave.
Already, all is set for the implementation of the Oil and Gas Industry Committee (OGIC) report and an announcement is to be made by the end of the week in an effort to drive efficiency and financial solvency in the upstream oil sector.
Mr. Odein Ajumogobia (SAN), Minister of State for Energy (Petroleum), confirmed the development, yesterday, saying it was time the issue was addressed.
�I directed that he proceed on leave while an independent audit of the 2007 bid round is conducted. We hope to expedite the process to reduce speculation over the decision,� Ajumogobia said.
Following the conclusion of the 2007 bid round which some people perceived as shrouded in controversy, investors who felt dissatisfied with the conduct of the exercise seized the opportunity of the entry of a new administration and wrote petitions challenging the DPR�s role.
In its response, government set up a committee headed by Mr. Olusegun Ogunjana to investigate the claim of irregularities.
Mr. Ogunjana�s committee has since submitted its report which raised contentious issues over award of some blocks in the last bid. However, further investigation is required to ascertain the veracity of some claims and it was gathered that this can not be done with Chukwueke still in office.
Alhaji Sabo Binni, Deputy Director personnel in DPR has since been directed to take over in an acting capacity until issues surrounding Mr. Chukwueke�s indefinite leave are resolved.
Vanguard learnt that the presidency has been innundated with petitions over the conduct of the last bid round and that President Yar�Adua had to direct Mr. Ajumogobia to act decisively to resolve the matter
It is expected also that following the conclusion of an independent audit of the 2007 oil bid round, blocks that are free from litigation would be given to the winners who are expected to sign a Production Sharing Contract (PSC) with the Nigerian National Petroleum Corporation (NNPC) and commence work on the fields.Other oil blocks not awarded are expected to be warehoused to form part of another licensing round with a date and time to be determined by the Ministry of Energy and the DPR
In the run up to the conduct of the 2007 licensing round, following criticism over time frame, Chukwueke had defended the exercise saying it was transparent and competitive, adding that all the activities leading to allocation of the block were electronically conducted with the results announced on the spot.
Two other licensing rounds, 2005 and 2006 (mini) were also conducted under Chukwueke�s direct supervision and all together earned the government in excess of $1.5 bilion in signature bonuses.
However, these rounds have not been without their fair share of controversies. After the 2006 mini round, Transnational Corporation (TRANSCORP) had petitioned former President Olusegun Obasanjo on how DPR awarded block 291 to China Petroleum Corporation/Starcrest Energy Limited and ultimately Addax Petroleum instead of Transcorp which bidded and won the block.
But, the ministry through its spokesman explained that Transnational Corporation and CPC/Starcrest each applied to be allowed to swap their blocks (OPLs 295 and 294 respectively) with OPL 291, on the floor of the bidding conference
.Also that following due consideration in the open observation of all present, Transnational Corporation, being the first to express interest, was given the chance to swap OPL 295 for OPL 291 but at $55 million being the price it offered for OPL 295.
He stated further that Transnational Corporation was unable to pay the Signature Bonus and meet the terms of the award at the expiry of the stipulated period of 3 (three) months).
Following the failure of Transnational Corporation to pay the signature bonus and identify a suitable technical partner, in line with the established process, the opportunity to swap was given to CPC/StarCrest to immediately pay the Signature Bonus of $55 million.
Jun172008