A company owned by a daughter of former
President Olusegun Obasanjo is among the beneficiaries of the Federal
Government’s recent secret allocations of prize oil blocks, Daily Trust
investigations show.
Findings reveal that All Grace Energy, in which Senator Iyabo
Obasanjo-Bello has majority stake, got the oil block Ubima Creek field
OML 17 in a discretional process without competitive bidding.
Some oil companies and industry experts said the secret allocations are against international best practices.
Daily Trust learnt that the secret
allocations were done over the past one year, even though government had
said the process of awarding oil licences were to be executed publicly
through competitive bidding.
A newspaper report recently said All Grace Energy is among companies that benefitted from the deals.
Records made available to Daily Trust by
the Corporate Affairs Commission (CAC) revealed that Iyabo
Obasanjo-Bello is the major shareholder of All Grace Energy, which was
registered on July 12, 2006 with N30 million share capital.
Mrs Obasanjo-Bello has six million
shares, followed by other directors/shareholders: Abe Magnus Ngei (2
million), Mrs Abiri Dorcas (3 million), Dr. Adenikinju Adeola (3
million), Ugbeya Donatus (1 million), Alabi Yekini (1 million) and
Alhaji Abubakar Abdullahi (1 million).
The company was registered “to operate
marginal fields for the purpose of producing petroleum, natural gas,
liquefied petroleum gas etc,” and has filed annual returns only up to
2007, according to CAC records.
Apparently reacting to the recent report
that oil blocks were awarded illegally, Director of the Department of
Petroleum Resources, Mr. Osten Olorunsola, said at a conference in
Houston, United States, that the president is empowered by law to make
such allocations.
This development flies in the face of
the Federal Government’s consistent pledges to conduct fresh oil bid
round. The last public oil bid was conducted during President Olusegun
Obasanjo’s regime.
In 2010, for instance, Petroleum
Minister Diezani Alison-Madueke said government was trying to “sort out
some issues” surrounding the previous bid rounds before it starts fresh
ones.
Instead, the government apparently
resorted to secret allocation of choice oil blocks to companies
belonging to cronies, family members and associates, industry analysts
say.
A player in the oil industry, who craved
for anonymity, told Daily Trust the government’s action would
discourage competition among indigenous oil operators and also send
wrong signals to international investors.
A source at DPR said that the process of
awarding the oil blocks to Iyabo actually started during Obasanjo’s
administration but “a disagreement between Shell and DPR over the area
to farm-out couldn’t be reached until recently when the Malabu oil block
deal was sealed between the Federal Government and the multinationals.”
Oil block deal conditions not met
When our reporter contacted the
spokesperson for the DPR, Mrs Belema Osibodu, she did not confirm or
deny that Iyabo’s company was given the oil block but said the marginal
fields were awarded based on some conditions.
She said the conditions included the
development/execution of a public private partnership (PPP) model for
three pilot projects under the small scale gas utilisation scheme.
Under this arrangement, Osibodu said, a
gas-fired power plant of not less than 5mw shall be dedicated to supply
electricity to Ubima community of Rivers State; an LPG extraction plant
shall be installed as part of gas processing facility; and a part of the
produced liquefied petroleum gas shall be designated for domestic use
and support of small scale industry in the community.
But when a Daily Trust reporter visited
Ubima community in Ikwerre local government area, there was no
indication that such project was being executed. The community happens
to be the country home of Governor Rotimi Amaechi.
The chairman of Ubima community, Elder
Daniel Anwuzurike, told Daily Trust that the community has been living
without electricity supply for the past three months.
Anwuzurike said he was not aware of any power project going on in the Ubima community.
‘Secret oil block deals going on for long’
The controversial oil field is
considered under “marginal oil fields” which the Petroleum Act (Amended)
1996 defines as “such field as the President may, from time to time,
identify as a marginal field.”
The law provides that the holder of an
OML can farm out (lease out) any marginal field which lies within the
Oil Mining Lease (OML).
Also, the president may cause the
farm-out of a marginal field which has been left unattended for a period
of not less than 10 years from the date of the first discovery of the
marginal field.
Reverend David Ugolor, Executive
Director, African Network for Environment and Economic Justice (ANEEJ),
said this was not the first time such secret allocation of oil blocks
was done by a president.
“In any case, the development
contravenes global best practice of open competitive bidding and as such
should be discouraged,” Ugolor said. “Nigerians are also kept in the
dark as to how much accrued to the country from the exercise. The
unresolved regulatory issues has not allowed potential investors, both
local and international, to make huge financial commitment in the
sector. Nigeria is losing huge resources from the dwindling investment
in the sector and there is also loss of potential revenue from
royalties,” he added.
Ifeayi Izeze, an Abuja-based consultant
on strategy and communication, said the controversies surrounding the
delay in passage of the Petroleum Industry Reform Bill (PIB) could be
blamed for the delay/shifting date for the 2012 oil bloc bid round.
When Daily Trust contacted the spokesman
for the Nigerian Extractive Industry Transparency Initiative (NEITI),
Mr Orji Ogbonnaya Orji, he said it is not the responsibility of NEITI to
decide how oil bid rounds will be conducted.
He however added that NEITI expects to be invited to observe the process in line with provisions of the law.
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