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Nigeria: Oil Blocs - Foreign Investors May Get Ultimatum

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Nigeria: Oil Blocs - Foreign Investors May Get Ultimatum

Post  Admin on Mon Jul 28, 2008 5:54 pm

The House of Representatives Committee investigating deals in the oil sector between 1999 and 2007 at the weekend said it would recommend that the government insist that foreign companies awarded oil blocs in 2006 should commence full implementation of the Memorandum of Understanding (MoU) it signed or have their blocs revoked.

This followed revelations by the Department of Petroleum Resources (DPR) that most of the foreign companies that were awarded oil blocs in 2006 and expected to invest in the downstream sector of the oil industry have not lived up to expectation.

The committee members told THISDAY that "following preliminary investigations, we discovered that the 2006 bid rounds which was used by government to attract investment in the downstream sector of the economy is not yielding any results as a result of inconsistencies.

"I am not going to pre-empt the report. But we will recommend that they be given ultimatum to show cause why they were given the blocs and commence the investment or have the licenses revoked. Other bidders were excluded from the rounds because of them and they brought in all sorts of sweet proposals. But two years after, they don't have anything to show for it. We have gone beyond the stage of being used as a pawn," a source close to the committee said.

Some of the companies had before being awarded the blocs on the instruction of former President Olusegun Obasanjo signed an undertaking to invest in road, railways, power plants and refineries.

But two years after, they have not even commenced feasibility studies.

The committee also explained that the investigation has been able to bring to the fore the news that former Directors of DPR have already agreed that some companies that did not participate in some of the bids were awarded oil blocs, while the Department has also refused to refund some of the oil companies who paid several fees running into billions of Naira more than five years after.

"We have been able to ascertain that several companies who did not participate in the bids were awarded blocs on directives from the Presidency while those who won legitimately were paired with strange bed fellows," said one of the co-chairmen.

The chairman of the committee, Honourable Igo Aguma told THISDAY that "it will be premature for us to start drawing conclusions at this stage. But one thing I must tell you is that we are not operating in secrecy. We have conducted the closed investigations and now we are conducting the Public hearing. At the end of the day, we will set the standards on how business should be run in the oil sector."

The committee also confirmed that there are discrepancies in the several bank accounts both in Nigeria and abroad for the purpose of capturing fees for signature bonus, application fees, and data prying fees. There was equally clear violation of Section 162 of the 1999 constitution on payments into the Federation Account."

He also said that some companies violated constitutional provisions as they are not registered with the Corporate Affairs Commission (CAC) or the CAMA, before being awarded oil blocs and only commenced that process months after they have been reawarded. We have a constitution and it is not meant for a few individuals. We all swore to abide by it."

THISDAY also confirmed that the committee careful not to delay the report of their findings before the House would after the first phase of the investigation and Public hearings on DPR present it to the House on the first day of its legislative business after the vacation


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