Nigeria to lose $10bn in oil and gas lease renewal – Senate

The Senate on Wednesday said Nigeria stands the risk of losing $10 billion in the ongoing lease renewal being undertaken by the Ministry of Petroleum Resources and the Department of Petroleum Resources (DPR).

This, it attributed to what it called illegal discounts and rebates in the process of lease renewal.

Consequently, it mandated its Committee on Petroleum Upstream to investigate all issues relating to the ongoing lease renewal being undertaken by the Minister of State for Petroleum Resources and the Department of Petroleum Resources (DPR).

Besides summoning the Minister of State for Petroleum Resources, Ibe Kachikwu and the DPR, the committee is expected to identify appropriate measures to correct the anomaly.

The resolution was sequel to a motion moved by the Chairman, Senate Committee on Petroleum Upstream, Tayo Alasoadura (APC, Ondo State) and co-sponsored by Baba Kaka Garbai (APC, Borno State), James Manager (PDP, Delta State) and Gershom Bassey (PDP, Cross River).

While observing that both the Minister and the DPR ‘have deliberately, willfully and brazenly decided to depart from the subsisting legal framework and due process mandated by extant law for the renewal of all leases’, the upper legislative chamber expressed concern that this is capable of short changing the country and denying the Federation the appropriate revenue accruable from the renewal.

In his motion titled: ‘Irregularities in the ongoing Oil and Gas lease Renewal and Massive Loss of Government Revenue’, Alasoadura alleged that companies whose licences are about to be renewed have refused to pay royalties in contravention of extant laws.

He expressed concern that since December 2017, the Committee has been inundated with petitions about irregularities surrounding the ongoing renewal of oil and gas leases.

He said: “The Senate notes with concern that the Honourable Minister of State for Petroleum Resources is granting all manner of illegal discounts and rebates in the process of the ongoing renewal of the leases;

“Observes that under the provision of extant laws, failure to pay royalties is a ground for revocation of leases and a legal barrier to renewal of applicable leases;

“Notes further that there is a subsisting legal framework and due process mandated by extant law for the renewal of leases that are due for renewal;

“Observes that the Honourable Minister of State for Petroleum Resources and the Department of Petroleum Resources have deliberately, willfully and brazenly decided to depart from the subsisting legal framework and due process mandated by extant law for the renewal of all leases;

“Concerned that the Department of Petroleum Resources has willfully and deliberately refused to provide the Senate Committee on Petroleum Resources Upstream with relevant information and data related to the ongoing lease renewal;

“Satisfied of the need to thoroughly investigate the ongoing lease renewal being undertaken by the Honourable Minister of State for Petroleum Resources and the Department of Petroleum Resources given the potential alarming Impact this Will have on government in terms of loss of revenue accruable to the federation and to ascertain the reasons for the anomalies in the ongoing lease renewal process and also to identify appropriate measures to deal with these anomalies through appropriate legislative and other supportive instruments”.

In his contribution, the Chairman, Senate Committee on Banking, Insurance and other Financial Institutions, Rafiu Ibrahim wondered why President Muhammadu Buhari who doubles as Petroleum Minister and his Chief of Staff, Abba Kyari, also a member of NNPC Board, were not mentioned in the motion.

According to the lawmaker, the Minister of State does not have the final approval for renewing leases.

In his remarks, Deputy Senate President Ike Ekweremadu who presided over the session, urged regulatory agencies to wake up to their duties.

His words: “We believe that we should be able to do what is possible in the circumstance to ensure that there is transparency in this present exercise. All of our major problems is the issue of enforcement and regulations because we have sufficient rules to guide us in almost all sectors. So, I just want to appeal to regulatory and enforcement agencies to wake up to their responsibilities in other to ensure that the correct things are being done in this country irrespective of who is involved.

“And I assure that now that we have taken up this matter, that should be a good way to start or at least to continue to ensure that we put our people on the right path of not only transparency but in the enforcement of rule of law including enforcement of existing laws and regulatory agencies ensuring that the correct things are being done”.