Oil Block Theft

Oil Block Theft: National Assembly Should Stop Obasanjo’s 2007 Licensing Round

Ifeanyi Izeze

In addition to his zigzagging political trajectory and long-standing fascination with funny Asian investors, President Olusegun Obasanjo has clearly demonstrated a genuine compromise of the overall national interests in the extractive industry particularly the oil and gas sector. The president and his associates have clearly demonstrated an outright lack of political will power to place national interests above their narrow personal interests in matters that concern not only availability of common petrol at affordable price but the genuine development of the nation’s upstream subsector.

Just as concerned Nigerians are still awaiting the Obasanjo-led administration to clear the piles of allegations of fraud that surrounded previous awards of the nation’s very lucrative offshore oil blocks, the Federal Government has concluded arrangement to offer or rather throw away the remaining 30 highly prospective oil and gas blocks in yet another sinister bid round scheduled for April 2007.

As was recently pointed out by an industry analyst, the Obasanjo-led administration has beaten the existing records as the administration that has given away more oil blocks than the cumulative total of all the acreages awarded by all the governments that rule since the end of the civil war.

If such acts were genuinely intended to boost the nation’s proven reserve as claimed whenever a new auctioning round comes up, why is it that this same government has never been bothered at all that majority if not all the trading companies awarded oil blocks since this new madness started, have not produced a single drop of crude oil from those acreages even though all that was required was simply to move-in a drilling platform, punch holes just beneath the sea floor and oil will gush out. The truth is that the deep/ultra-deep offshore is not an all-comers arena. It is for operators who know what they are doing not for traders or government semi-illiterates.

Hear what Nigeria’s Energy Minister, Dr. Edmund Daukoru, had to say concerning the administration’s send-off -flinging of the remaining lucrative oil and gas blocks:

“There is this delicate balance between ensuring due process and transparency while also assuring our development partners (Asian investors fronting for government officials) that they will get the blocks. This process had to be extensively debated by a technical committee drawn from the Ministries of Finance and Justice, NAPIMS and NNPC.

“Their brief was to ensure that our national interest is protected while we follow due process and ensure transparency. This takes a bit of time and I am hopeful that as soon as I get back and get presidential clearance, I would announce the round.”

“First, there are countries with which we have developed a very strong bilateral relationship for major infrastructural development like the railways, hydro schemes, telecommunications, and major gas pipelines. These countries have to be treated with the rules of transparency and still there is some assurance that they will get the blocks. So, we have to come up with a process that guarantees transparency and due process.

Pathetically, this pronouncement by the Energy Minister came just few days from media reports quoting him as haven lamented that most of the Asian companies that agreed to massively inject offshore funds into the nation’s downstream sector especially private refineries and petrochemical plants in addition to their participation in the government’s zero policy independent power generation and distribution initiative have failed to honour such agreements. Meanwhile these were part of the critical conditions that made such companies got lucrative oil blocks. The annoying aspect of the entire game is that majority of those companies started lifting crude oil from Nigeria since the minute the won the bid.

Question for the Energy Minister: How many oil blocks allocated to the delinquent Asian businesses have been retrieved? None! It is very clear that somebody is not telling Nigerians the truth.

Since it has been established that these companies have failed to leave up to the conditions of such awards, why have some of them continued to lift crude oil produced by more serious or rather genuine operators in the industry?

What has prevented the Ministry of Petroleum (DPR) from publishing the names and owners of such companies and affected acreages with a serious threat to withdraw them? The answer to the last question is obvious. Na the same people.

At least from records that are known to ordinary DPR staff, funny Asians gangs fronting for Nigerian politicians have so far been awarded more than 20 oil and gas blocks in lucrative frontiers. And interestingly, none of them has done even the minutest exploratory or appraisal work on any of those blocks. This is despite the fact that most of those blocks were surveyed (as least area sweep) before these thieves received them from the collaborating thieves in government.

Also the downstream projects which were tied by the Presidency(then when the president directly administered oil matters) to the award of those lucrative blocks to these funny lovers of Nigeria from Asia particularly private refineries and petrochemical plants are yet to even identify a site not to talk of clearing or construction. Government can fool all the people some times but not all the times.

The big question the present Government must answer if not publicly, at least frankly in their secrete Federal Executive Council (FEC) meetings is: Why is the Obasanjo-led government hell bent on emptying all the lucrative oil and gas blocks in the nation’s arsenal before leaving office? Must you share all the nation’s assets among yourselves before leaving office? If the previous governments gave away all that we had, could the present administration have met these ones they are grabbing for themselves?

Another issue that should bother President Obasanjo and his lieutenants at the Energy Ministry is the rationale behind everybody rushing for the remaining lucrative oil and gas blocks in the offshore frontiers. This issue has become pertinent because Nigerians are no longer convinced by the government’s excuses of boosting proven reserves.

If the genuine reason for the monthly auctioning of oil blocks by the present administration was to boost the nation’s oil reserve and production capacity/output, why are there no exploration efforts in the other highly prospective sedimentary basin especially the inland basins such as the Chad Basin, Benue Trough, Anambra and Bauchi basins among other prospects?

Industry experts have taken time to analyze some of these new entrants or rather grabbers of Nigeria’s lucrative oil blocks and it has been confirmed that majority if not all of them have near zero technical and financial capacity to operate in swamps not to talk of deep and ultra-deep arena.

Agreeing to build a private refinery in Ibadan where there is no single trace of crude oil in the subsurface sounds politically good, but producing from a deep/ultra-deep oilfield is an entirely different thing. The conscience of those government officials that packaged the policy or more aptly initiative would have told them that it was an outright deceit.

True to what an oil industry analyst proclaimed,

“Nigerians cannot afford to continue the present nonchalant attitude in matters that affect their sole existence as a nation. How can a group of very few people in the present government share among themselves all the available national assets including very lucrative oil and gas leases and the entire nation watches as if it doesn’t matter?”

Nigerians must rise up not only to condemn the broad day robbery but to stop it and maybe move to reverse earlier robberies especially in cases where it has been established that the intentions were not only fake but against our collective national interests.

The National Assembly as representatives and voice of the Nigerian citizenry should quickly interfere and halt the proposed April send-off bid round or more aptly allocation of oil and gas blocks to government loyalists.

In addition, since the Energy Minister has publicly acknowledged that majority of the companies awarded oil blocks in previous licensing rounds have failed to meet up the terms of such awards, the National Assembly should ask for urgent clarification on what the Minister intends to do within the remaining few days of the lifespan of this administration to retrieve the more than 30 blocks given to such voodoo companies. Nigerians especially the youths would be glad if such acreages are retrieved and kept for future developments.