Reps Panel Indicts Lukman, Daukoru, Kupolokun


December 21, 2008

Reps Panel Indicts Lukman, Daukoru, Kupolokun
By Festus Owete, Assistant Editor, Abuja

Newly appointed Petroleum Minister, Rilwan Lukman, former Minister of State for Petroleum Resources, Edmond Daukoru have been indicted by the House of Representatives Ad-hoc Committee investigating the activities of the Nigeria National Petroleum Corporation (NNPC), its subsidiaries and the Department of Petroleum Resources(DPR).

Also indicted is the former Group Managing Director of NNPC, Funso Kupolukun.

While frowning at the way activities were conducted in the said offices, the committee has recommended that the Federal Government should recover within 60 days signature bonuses amounting to about $360 million from firms which won oil blocks during the bidding in the last seven years.

The panel also recommended that the Economic and Financial Crimes Commission (EFCC),the Independent Corrupt Practices and Other Related Offences Commission (ICPC) and the police should further investigate the role played by administrators of the bid rounds.

The recommendations are contained in the interim report submitted by the committee last Wednesday and made available to Sunday Independent.

The 26-member committee headed by Igo Aguma (PDP, Rivers) was set up by the House in plenary in April to, among other things, determine the actual allocation of domestic crude oil to NNPC as well as quantity of refined petroleum products derived thereof for domestic consumption, and revenue, if any from May 1999 to May 2008.

The committee was also mandated to ascertain the identities, particulars, status and the basis of the engagement of companies, enterprises and individuals by the NNPC for the importation and exportation of petroleum products as well as those that have benefited from oil blocs allocation during the period under review.

The committee said in the 64-page report that the Federal Government lost enormous revenue in the bid process, partly because of the staggered payment of signature bonus and partly, because of the suspicious manner the administrators conducted the rounds.

It noted, regrettably, that in the 2000 bid round alone a total of $248 million was lost by the Federal Government following the shoddy manner it was handled.

According to the committee, during the 2000 bid round SNEPCO paid only $75 million out of a total signature bonus of $200 million for OPL 250 leaving a balance of $125 million. It noted though that the field was later abandoned by SNEPCO.

It also said that another firm, Ocean Energy Nigeria Limited which participated in the 2002 bid process for OPL 256 owes government the sum of $220 million on signature bonus since the $70 million it claimed to have paid as part of the fee, could not be traced in the records.

The committee also said that the sum of $20,000 application fee and another $10,000 processing fee should be recovered from Statoil (Nigeria) Limited for participating in the 2002 bid round pursuant to the 2000 Guidance Notes.

It also recommended that Elf Petroleum Nigeria Limited should pay $20 million to the government and another $5 million being an outstanding signature bonus on OPL 233, which it won during the 2003 bid round.

It demanded that all the 35 companies that are identified as having no forms before participating in the 2005 bid round should be made to pay the mandatory $10,000 application fee and $10,000 processing fee to the government immediately.

Said the committee: “The Federal Government should put machinery in place to recover all outstanding signature bonuses, subject to the express provisions of the Production Sharing Contract (PSCs), from the winner of blocks who are in default of payment within a reasonable time but not exceeding 60 (sixty) days from the date of this report. At the expiration of that time frame the award should be revoked regardless of whether or not the blocks are either in development or production as the non-payment of signature bonus is a breach of the fundamental condition of the award of the block.”

However, it called for the review of the award of OPLs 321 and 323 to KNOC during the 2005 bid rounds, saying the exercise “violates all principles of transparency in the extractive industry and violates due process.”

The committee recommended that the award should be reviewed and cancelled in the national interest while “ONGC Videsh Limited that was the original winners of the block should be given the opportunity to pay the signature bonus of $485 million on the Block.”

It further recommended that the former Minister of State for Petroleum Resources, Edmund Daukoru “must be censured for his role in the KNOC saga.”

The panel also frowned at the role played by the newly-appointed Minister of Petroleum Resources, Rilwanu Lukman, who was then the Special Adviser to the President on the Petroleum as well as the then Group Managing Director of NNPC, Funso Kupolokun in the administration of the various bid rounds in his capacity as Special Assistant to the President on Petroleum.

“The duo of Alhaji Rilwanu Lukman and Engineer Funso Kupolokun should be reprimanded for arrogating to themselves the discretionary powers of the Minister,” the panel said.

It noted further that: “The various acts of reprehensible conduct exhibited by the administrators of the bid rounds should be thoroughly investigated by the relevant agencies (the Police, EFCC and the ICPC) with a view to prosecuting those persons whose actions and conduct were induced by improper motives. The rules and regulations for Local Content Vehicle participation in the process should be clearly developed and enacted.”

It condemned former President Olusegun Obasanjo for occupying the position of Minister of Petroleum at the same time while in power, insisting that “it is unconstitutional.”

The panel said: “This constitutional anomaly potentially undermines the legal process of the bid round as it can be contended that there was no minister constitutionally recognised that oversaw the bid rounds in accordance with section 2 of the Petroleum Act.”

The panel also frowned at the rush with which the 2007 bid round was organised within two weeks of the handover ceremony to President Umaru Yar’Adua.

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