NNPC denies involvement in $1.1Bn oil block signature Bonus, royalties

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31 January 2017, Naija247news, Abuja – The Nigerian National Petroleum Corporation (NNPC) has clarified that it is not involved in the collection of signature bonuses (funds) paid by oil companies to the Federal Government upon their successful bid for oil blocks.

The House of Representatives last week, begun an investigation of the allegedly missing $1.1billion signature bonuses which accrued to the country from Oil Prospecting Licences (OPLs).

Consequently, the House has invited the governor of the Central Bank of Nigeria (CBN), Mr Godwin Emefiele; the group managing director, Nigerian National Petroleum Corporation (NNPC), Dr Maikanti Baru, and the executive secretary, Department of Petroleum Resources (DPR), Mr Mordecai Baba Ladan, to come and explain the whereabouts of the money.

Shedding light on the role of NNPC in the oil revenue collection process at a hearing of the House of Representatives Ad Hoc Committee on Oil Prospecting Licenses (OPLs) and Oil Mining Leases (OMLs) on Monday, the Group Managing Director of NNPC, Dr. Maikanti Baru, said the Corporation had no role in the collection of signature bonus.

According to the GMD who was represented by the Corporation’s Chief Operating Officer, Upstream, Mr Bello Rabiu, it was the Department of Petroleum Resources (DPR), not the NNPC, that was charged with the responsibility of taking receipts of signature bonuses and royalty.

The GMD, however, said the arrangement allowed NNPC to lift the royalty oil from Production Sharing Contracts (PSCs) and remit the proceeds to the DPR, adding that confirmation and reconciliation of royalty payments to the sister agency were carried out at the monthly meeting between the Office of the Accountant-General of the Federation and revenue generating agencies.

NNPC assured the Ad Hoc House Committee that it would furnish it with all pieces of information on its royalty remittances from the PSCs to the DPR from 1992 till date.

On his part, Chairman of the Ad Hoc Committee, Hon. Gideon Gwani said the Committee decided to invite all the agencies involved in the collection of oil revenues and the Central Bank of Nigeria (CBN) to resolve the claims and counter-claims regarding the whereabouts of some signature bonuses and other revenues from some OPLs and OMLs.

He explained that the committee was mandated by the House of Representatives to investigate the award of all OPLs and OMLs granted to oil companies by the Federal Government to, among other things, ascertain whether due process and guidelines for the acquisition of oil and gas assets were complied with.

Hon. Gwani noted that the signature bonuses paid by owners of some OPLs, which amounted to over $1billion, could not be traced.

According to Gwani, all efforts to trace the money were futile as the DPR, CBN, Petroleum Technology Development Fund (PTDF), NNPC and the Accountant-General’s Office denied the committee details of the transaction.

He explained that the DPR could not confirm if the fees claimed to have been paid by the oil companies had actually been received by the government through the CBN, the banker to the federal government.

“It has been realised through our investigation that we need, seriously, evidence to prove that signature bonuses are paid,” he said.

Gwani stated further that the DPR advised the committee to request the information directly from the CBN, while the CBN told the committee to liaise with the NNPC on OPLs and OMLs, with the DPR on royalties, and with the accountant-general of the federation on signature bonuses.
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The committee established that signature bonuses amounting to $835 million, which accrued from OPL 250, 291, 332, 276, 321,323,283,315, 257, 279, 285, 288, 298, 471, 289, 284 and 236, as well as part payment of $271.18 million signature bonuses from OPL 214, 324, 320, 318, 256, 242, 223, 221, 245, 247, 322, 248 and 249, could not be traced.

“We need evidence that full payments were made for OPLs 250, 291, 332, 276, 321, 323, 283, 315, 257, 279, 285, 288, 298, 471, 289, 284 and 236, and the total amount we are looking for is $835 million.

“We also need evidence of part payments of OPLs 214, 324, 320, 318, 256, 242, 223, 221, 245, 247, 322, 248 and 249, which amount to $271.18 million, leaving the balance of $648.2million,” Gwani said.

Although the committee acknowledged that most of the OPLs had been converted to OMLs, Gwani said they were listed at their state when the transactions took place.

“Most of the OPLs have been converted to OMLs, but we have chosen to list them at the state at which the debt and payment occurred,” he clarified.

The lawmaker explained that the committee was mandated by the House of Representatives to investigate the award of all OPLs and OMLs granted to oil companies by the federal government to, among other things, ascertain whether due process and guidelines for the acquisition of oil and gas assets were complied with.

“It is, therefore, noteworthy that payment of fees before and after the acquisition of oil blocks fall part of the due process required to be fulfilled by the Petroleum Act, which this committee was mandated to investigate,“ he said.

Gwani pointed out that the agencies’ refusal to provide required information spoils the image of government and undermines its fight against corruption, adding that “The development is unfortunate especially at the time when the government is in dire need of money to fund its projects.”

Other agencies invited for the hearing included the DPR, CBN, Office of the Accountant General of the Federation and the Petroleum Technology Development Fund (PTDF).

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