DPR failures cost Nigeria $565.8m - Reps

The Department of Petro­leum Resources (DPR) yesterday came under fire as the House of Representatives noted that the department’s in­ability to monitor and hold oil companies to their commit­ments in agreements culminat­ing in the award of Oil Prospect­ing Licences (OPLs) and OML Mining Leases (OMLs) has cost the nation the sum of 565.8mil­lion US dollars.

The House of Representatives Ad-hoc Committee probing al­leged fraud in the allocation of OPLs, OMLs made this known on Wednesday.

The House did not only frowned at the alleged sharp practices perpetrated by DPR, but queried the agency for tag­ging the loss of $565.8m due to non-payment of licencing fees, which spanned through a period of three different bidding rounds in 2005, 2006 and 2012.

It also frowned at the use of the term “outstanding payments” as referred to by a Deputy Director of DPR, Mr. SundayAdebayo Ba­balola while making a presenta­tion on behalf of the agency.

The Committee expressed worry over the award of oil blocks by the agency to compa­nies other than those who bided for and won the licences without any evidence of disqualification nor a right of first refusal of the original winners of the bids.

It had earlier asked for the number of blocks awarded us­ing open competitive bidding and those through discretion by the minister as well as evidence of advertorial announcing the bid­ding process for the blocks, with the DPR insisting that every bid round followed a transparent and due process.

DPR’s Babalola had said: “Peo­ple behind the companies which got allocated blocks were all un­veiled during technical process before the bidding was done.”

On blocks won by a company being given to another, he said that happened in 2005 and 2006 bid rounds for specific reasons.

The committee therefore reeled out instances of diversion of OPLs such as OPL 907, 917 won by VP Energy Limited but were given to another company as well as other instances.

“In January 20th 2006, the Minister of State in a letter to the President, said that out of the 44blocks won in 2005 bid round, payment for 19 blocks had been committed in full, 17 blocks were partial payment and the remain­ing blocks were not paid for at all.

“The President ordered cancel­lation of blocks for which part or no payment had been made and have returned to the basket for future bid rounds. However, 21 blocks were awarded as against 19 for which payment were made to government.

“Tenker System were to pay 210million dollars and they paid only 21million dollars which was why the President cancelled their bid. Later, one Sterling Global came and took over the block for just $57million. Who pays the balance to government on the value of the block”? The committee queried. growth and development.

“As a Parliament we strongly believe that, the downward slide in Nigeria’s economy, provides the best opportunity for major stakeholders to begin to return the economy to vibrancy. We are confident that the Capital Market can, and should perform this role.

“The two chambers of the National Assembly have therefore, come to the jolting realization that the Nigerian economy cannot fully develop without making the capital market the hub or pivot of its developmental strides.

“This market has long been neglected and denied its rightful and strategic role in our march towards economic recovery. The Capital Market is a veritable institution for the mobilization, allocation and utilization of long term funds, not just by the Federal but also for States and Local Governments”, he added.