At resumed investigative hearing of the House of Representatives Adhoc Committee investigating the alleged loss of over $2.4bn in revenue from illegal sales of crude oil, lawmakers mount pressure on the Minister of Finance to make required submissions
The Minister of Justice and Attorney-General of the Federation (AGF), Abubakar Malami, on Thursday finally bowed to pressure, expressing his readiness to provide relevant information on the alleged sale of forty-eight (48) million barrels of crude oil amounting to over $2.4 billion and crude oil export to global destinations from 2014 to date.
Malami made his intention known via a letter sent to the Ad-hoc Committee Chairman, Rep. Mark Gbillah, during the resumed investigative hearing on Thursday.
At the resumed public hearing, Rep. Gbillah said: “Today we are in receipt of a letter from the Attorney-General of the Federation and the Minister of Justice who is averring his determination to respect the doctrine of separation of powers and to support our extant laws. And he has indicated the fact that they are trying to put together the comprehensive response that we have raised.
While we appreciate the Attorney-General’s response, we would like to indicate that it came a lot later than we expected, and it came without the response that we referred to. So, we would appreciate it if the Attorney-General and Honourable Minister provides these responses and also appear before the Committee next Thursday. So, let’s give him the window to appear before the Committee.
Unfortunately, the Honourable Minister for Finance has still been evasive. The Committee has not received any submission or response from the Honourable Minister of Finance. The Accountant-General sent a response and has not responded to our follow-up because we asked further questions about what he provided us information about. But we want to call on the Honourable Minister of Finance. Like the Attorney-General, show regard and respect for the separation of powers as enshrined in our Constitution, and respond promptly to the request of the Committee so that we can get to the bottom of our investigation.
Like I already said, we are giving her the benefit of the doubt. We are not unmindful of the other powers we have, and we are afraid to exert them, and we will do so if the leeway we have provided is still neglected and not recognised by the Honourable Minister of Finance,” he said.
The lawmakers, during the resumed investigative hearing, quizzed the management staff of some oil companies involved in the lifting and sales of crude oil to global destinations in furtherance of the investigation into the alleged sale of 48 million barrels of crude oil amounting to over $2.4 billion and crude oil export to global destinations from 2014 to date.
Some of the companies who appeared before the Ad-hoc Committee chaired by Rep. Mark Gbillah uncovered unsigned and unstamped documents submitted by Equinor Nigeria Energy Company. Other companies quizzed by the Ad-hoc Committee include Millennium Oil and Gas Company, SAPETRO, PANAMA, Moni Pulo, among others.
The lawmakers also quizzed some Deposit Money Banks (DMBs) operating in the country, including Fidelity, Union Bank and Ecobank Plc, respectively.
Speaking during the investigative hearing into the activities of Equinor with respect to the OML 129, the lawmakers frowned at the inability of the company to effectively operate the asset as well as breach of extant laws, thereby resulting in loss of revenue to the Federation.
“Why I’m saying this is because you had a period of exploration that elapsed, and you did not bring anything to production. You have the OML phase till date. You told us here on oath that you’re still exploring. In all intents and purposes, I wouldn’t (would not) renew the license to you, if I was to be the commission. I wouldn’t do that because you have not been able to meet those terms after 30 years,” Gbillah remarked.
In his response, Equinor’s Chief Financial Officer, Mr Charles Nwoko, acknowledged that the 30-year licence obtained in 2013 will expire this year. He further explained that the company is looking at the most commercially viable way so that it can bring value to the Nigerian government and earn profit as a contractor in the operation.
Speaking further, Rep Gbillah, who observed that the company does not have the capacity to operate the Deep Offshore asset, maintained: “It can also be that you don’t have the capacity to be able to operate that facility, especially since it is gas; because we have an understanding of what it will require to do gas deep offshore. So, perhaps that is the problem you are having,” he noted.
Dismissing the insinuation, Mr Nwoko said: “No, that’s not it, Mr. Chairman. Like I said, Shell is the operator in the pre-unit phase, and we are working with Shell on that. And, like you know, you did acknowledge that it’s a deep offshore discovery, because we do not have the facility to aggregate gas. It’s not like oil that is more fungible. Gas is not as fungible as oil.
So, it surpasses more complex process, and that’s why we are looking at what is optimal because you know, the pricing of gas based on the current terms we have in Nigeria. We have to look at what is economical. At the end of the day, it’s about getting value for the government and getting value for the stakeholders. So that’s where we are.”
While noting that there is no gas in the PSC, he argued that: “the expectation is that the Petroleum Industry Act (PIA) will address that but the PIA does not still address that. That’s part of the challenge we have.”
Asked to explain why PIA did not address the concern, Mr Nwoko said: “It didn’t (I did not address what we call willing buyer, willing seller in terms of the market determining price; those were not clearly set out in PIA.”
Mr Nwoko, who affirmed that the Gas Flare Commercialisation Roadmap is part of what the Federal Government is progressing on, noted that the initiative aimed to end gas flaring.
“But in terms of what we have as gas development for Deep Offshore Field, that has not been addressed. But like I said, we are working on this. Looking at the most appropriate concept, commercially viable both for us and the government that can help us develop that discovery.
We are on it, we have been talking to government and to understand that, like NNPC usually say, that we are in the decade of gas, that is part of the motivation for what we have been doing,” he however added.
Speaking further, Mr Nwoko, who affirmed that the oil company is owned by the Norwegian Government, said: “We’ve been instrumental to the development of oil and gas in Nigeria as well as capacity development. We’ve had extensive relationship with NPD – Norwegian Petroleum Directorate and DPR as it was then and of course, building capacity. So, it is something that we are mindful of and we have concern about this. So, it’s not that we have been sitting on our arms and not doing anything. We are working tenaciously on this.”
In his reaction, Rep Gbillah said: “Yes, we appreciate that, and which is why it is surprising when we know that Norwegian Government is a key shareholder, your company that they are not investing their Sovereign Wealth Fund that seems to be amassing daily towards production that would of value to us as a country.
You can see where the world is going, we are going in the gas direction, and we have this kind of asset that for 30 years nothing has happened on. So, it can be the decision of this Committee to NNPC not to further renew Equinor because we have not seen the capacity being displayed.
We need the influx of resources that can immediately be of benefit to the country. We keep going cap-in-hand looking for funds here and there, and we have this type of asset that is not being attended to. So, this is something that we have to take note of. Before we ask you further question, we are dwelling on this so that you’ll understand. This still boils down to the resources we are losing as a country as well,” he stressed.
The lawmaker, while scrutinising the document submitted by the Equinor representative, expressed concern over some of the documents that were not signed nor stamped, while others did not show the codes.
Speaking further, Rep Gbillah, who noted that the PIA addresses specific regulations, explained that there is currently a gas policy that has been initiated by the commission, and wondered why Equinor failed to explore the opportunities. He added that after the Road Show, some companies have started submitting expressions of interest to the Commission.
To this end, the Committee resolved to request information about Equinor’s annual obligation and compliance with the statutory requirements.
Gbillah also requested documents such as proof of Pre-shipment certificates, Q88 form, names and statements of accounts where proceeds of crude oil sold are deposited, stock certificate, copies of procurement details, details of cargoes, date of crude lifting, quantity, destination, and type of crude lifted, among others, which are to be submitted by next week Wednesday.