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PTDFgate: NNPC’S Unclear Accounting for the Missing $555m Bid Proceeds By Senior Fyneface
When the late reggae superstar Bob Marley prophesied before he died that obviously, “This uprising will bring out the good in us”, little did he know that his prophesy will be fulfilled by the ongoing rift between President Olusegun Obasanjo and Vice President Atiku Abubakar over succession agenda.
Following the revelation that the Nigerian National Petroleum Corporation (NNPC) realized about $700 million as proceeds from the 2002/2003 licensing rounds and out of that money, about $555 million was withheld by President Olusegun Obasanjo, who since 1999 has been acting as the Petroleum Minister and sole administrator of the NNPC, the corporation has made serious attempts to clarify facts behind the figures.
The allegation was that only $145 million of the entire proceeds was released to the Petroleum Technology Development Fund PTDF accounts. However, in its reaction, the NNPC tried to explain that “payments were made to PTDF in due measure in accordance to the prevailing financial regulations as ordered by the President”.
The NNPC claimed that all funds meant for PTDF were remitted to the Fund’s account and in the reserve accounts held by the Fund at the Central Bank of Nigeria (CBN), in accordance with established financial control management.
This was NNPC clarified the facts of the matter: “The total signature bonus realizable from the blocks reduced from $724 million to $460 million from eight blocks as a result of litigation that trailed OPLs 249 and 322.
“At the time the PTDF Act was established, it was not envisaged that huge amount of monies could be realized from signature bonuses. Consequently, following the 2000 Bid Round, in which large sums of money were offered, it became evident that the monies realized from the above stated 2000 Bid Round were far in excess of what was reasonably required for training as stipulated in the PTDF Act.
“It was on this note that the Office of the Petroleum Adviser, in December 2000, drew the attention of President Obasanjo to the monies realized and sought for an arrangement that would benefit other sectors of the economy. The President thereafter directed that the Federal Ministry of Finance and the Governor of CBN should deal with the issue raised by the Petroleum Adviser as appropriate.
NNPC said out of the 10 blocks placed on offer, two blocks, namely OPLs 249 and 322, were subject of litigations and were therefore not awarded. It added that the signature bonus realizable from the blocks subsequently reduced from $724 million to $460 million for the remaining eight (8) blocks. The Corporation said under the terms of the award, payments for the offered signature bonuses were staggered in three (3) phases, such that a portion qualified for immediate payment and the remainder deferred for payment upon OML conversion and commencement of first crude oil production respectively.
We have heard the NNPC side of the story so let us examine all the authentic facts and figures presented by the nation’s apex oil concern in its attempt to clear itself from the missing $555 million proceeds from the 2002/2003 licensing rounds.
The corporation, in praise of the new approach ushered in by President Obasanjo in 1999, confirmed that a total signature bonus of $724 million(excluding other premium payable on reaching certain stages of production) was offered for the 10 oil blocks on sale. Meanwhile it had earlier said “The total signature bonus realizable from the blocks reduced from $724 million to $460 million from eight blocks as a result of litigation that trailed OPLs 249 and 322”. So the operating words here are “offered and realizable”.
The offered amount was $724 million, however, the realizable amount dropped to $460 million. Meanwhile, “Our (NNPC) record shows that the $222 million realized from the 2000 Bid Round has been fully paid to the Federal Government”. There was an obvious hiatus in the figures behind the facts by the NNPC.
Also, the cumulative license fee for 10 oil blocks was $724 million but because there were litigations involving only two blocks, the entire fee dropped to $460 million. So the two controversial oil blocks cost $264 million while the other no-controversial eight blocks cost $460 million. Here again, there was something seriously abnormal especially in valuing of the blocks. The more controversial a block is, the more expensive it becomes that was what the NNPC tried to explain.
The figures from NNPC show that the entire exercise, from their perspective, was supposed to generate about $460 million but it got only $222 million which it has fully paid to the Federal Government leaving a balance of $238 million. So, where is this balance?
Still on the new and commendable approach for award of acreages ushered in by President Obasanjo, the NNPC boasted of the greatly improved license signature bonus but deliberately did not disclosed the band obtainable in the industry today. It only said that before the new reform, the maximum fee was $30 million for a block so what is the maximum fee for blocks under the current dispensation. And who pegs the ceiling; the NNPC or the President uses his discretion to fix signing fee for the blocks? These information would go a long way in assisting Nigerians ascertain why only two blocks (controversial) should cost over 50 percent of the entire fee set out for ten oil blocks. To place in proper context, majority of the ten blocks if not all are in the same offshore arena whether deep or in the shallow waters.
SENIOR FYNEFACE, ELELEWON STREET , GRA II, PORT HARCOURT , RIVERS STATE
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