The Economic and Financial Crimes Commission has said it will investigate the sale of oil acreage that was offered in open auction but subsequently sold behind closed doors.
The EFCC�s Chairman, Mallam Nuhu Ribadu, was quoted by the Financial Times of London as saying that the commission would examine how a lucrative oil block was sold off without being declared by Nigeria�s petroleum ministry, despite open bidding procedures designed to bring a measure of credibility to Nigerian oil licence awards.
�I want to assure you that this will definitely be investigated. As I have always said, it is no longer business as usual in Nigeria,� Ribadu added.
Addax Petroleum, a Swiss-based Canadian listed company that has a strong interest in Nigeria, had on October 24, 2006 announced it had agreed to pay $90m to take control of Oil Processing Licence 291, an oil block that had been left untouched in an open auction in May. The block is adjacent to an offshore oilfield being developed by US oil group Chevron.
Addax had said in its statement that it had agreed to acquire its interest in the block from Starcrest, a little known indigenous Nigerian company.
The FT report cited an unnamed ministry official as saying that Starcrest had taken initial control of the block with a promise to pay the government a $55m signature fee.
Attempts by our correspondent to reach the Director, Petroleum Petroleum Resources, Mr. Tony Chukwueke, on the phone proved abortive, as his phone was switched off.
When our correspondent contacted Addax, no official of the oil firm was willing to speak on the matter.
Ministry officials have not publicly explained how the block was awarded to Starcrest, a company with no proven track record in the oil industry but which industry sources said had strong political connections.
Blocks that receive no bid in open auctions are normally reserved for future bid rounds, a policy not applied when Starcrest privately negotiated control of the block after the closure of the 2006 bidding in May.
The Federal Government under President Olusegun Obasanjo introduced a system of open oil block auctions as a break from the discretionary awards prevalent under past military regimes.
However, the FT report noted that no comprehensive list of the dozen winners of licences in 2005 had been officially published by the government to date.
Nigeria is preparing to auction 50 blocks in a bid round planned to take place before the year�s end but government officials are already talking about keeping a watchful eye on licence awards.
�If anything happens that is not in the spirit of the transparency template, we will flag it and take it up,� said one official in Nigeria�s Extractive Industry Transparency Initiative.
Anti-corruption activists have expressed fear that, in spite of strong rhetoric from government officials, transparency efforts could be undermined as senior politicians build up funds in the run up to next April�s national elections.
�Let�s hope we are not preaching one thing, but doing another,� said Assisi Asobie, head of Nigeria�s chapter of Transparency International.
NEITI�s chairwoman, Obiageli Ezekwesili, told FT she would ask petroleum ministry officials to explain the Addax deal before she could make a pronouncement.