NPDC refutes wrongdoing in N59 trillion oil block deals
The Nigerian Petroleum Development Company Limited (NPDC), yesterday, debunked the allegations trailing the award of four oil blocks, OMLs 26, 30, 34 and 42, saying that there was no iota of truth in the said report as published by some newspapers.
Specifically, NPDC said there was never any sale of equity involved with Atlantic Energy Drilling Concept, but a mere transaction between Nigerian National Petroleum Corporation (NNPC) and its subsidiary, Nigerian Petroleum Development Company Limited (NPDC), in compliance with the provisions of the Joint Operating Agreement (JOA).
The Managing Director of NPDC, Victor Briggs, said in a statement made available to The Guardian yesterday, that the report, which alleged that the ministry of petroleum resources did not follow due process in the award of the four oil blocks, appeared very similar to the defunct NEXT234 publications of June 2011.
Group of protesters from Delta State oil producing communities, had alleged that the Minister of Petroleum Resources, Allison-Madueke secretly transferred four oil blocks to an unqualified contractor – Atlantic Energy Drilling Concept Limited, a company that neither tendered nor bided for the blocks.'
They said: 'By this deal, 60 per cent of NNDC's 55 percent stake of these assets is about five billion barrels, which when calculated with the 2013 crude oil benchmark comes to $380 billion or N58.9 trillion, this figure is exclusive of the 4 trillion cubic feet (4TCF) of gas asset in the blocks valued at $15.72 trillion.'
Reacting to the issue, Briggs described the allegations as false, unfounded, and malicious aimed at defaming the character of the Minister of Petroleum Resources.
He however denied that Atlantic Energy Drilling Concepts was never assigned equity in the oil blocks.
According him, the 55 per cent equity interest in those blocks were assigned to NPDC, which is the country's National Oil Company and an exploration and production (E&P) subsidiary of NNPC.
'In line with the governing provision regulating divestment or transfer of participatory interest in any oil block, the Minister after due consideration, approved the assignment of NNPC's interest to NPDC. Needless to say, the Minister's action is within the scope of her statutory oversight responsibility and in essence for the greater benefit of the nation.'
We must also point out that NPDC, as a subsidiary of NNPC, is as indigenous as any community can claim to be and represents a much wider scope of indigenous rights than the Delta State Oil Producing Communities.
'The allegation of deliberate exclusion of indigenous rights is in contrast with the established pro-indigenous position of the Minister as demonstrated in her administration of the oil and gas sector'.
Dwelling on the alleged illegal assigning of 55 per cent interest to Atlantic Energy, Briggs explained that NPDC entered into a Strategic Alliance Agreement with the company, in order to meet its critical funding obligations in the OMLs. 'These types of funding arrangements have been in existence since the late 1990s. They are not new to the industry. It is therefore false to say that the Federal Government's 55 per cent equity interest has been sold to Atlantic Energy'.
He stressed that there was never any sale of equity involved but merely a transaction between NNPC and its subsidiary, NPDC, in compliance with the provisions of the Joint Operating Agreement (JOA). The transaction at issue was not an acreage allocation exercise neither did it involve the issuance of a prospecting license.
He faulted the allegation, saying that the selection of Atlantic Energy Drilling Concepts was not through transparent process, saying, 'neither NNPC nor its subsidiary NPDC is selling or has sold its equity interest in the four OMLs. As such, there is no need for a bidding process as no government equity interest was sold to any third party, be it local or foreign.
'As part of NNPC policy, a thorough background check was carried out on Atlantic Energy Drilling Concepts, and there is no evidence indicating that the Minister of Petroleum Resources has any direct or indirect pecuniary interest in the company'.
The NPDC boss noted that the quoted reserves of five billion barrels corresponding to 60 per cent of NPDC 55 per cent equity was a calculated attempt to mislead the National Assembly and indeed the people of Nigeria as the entire 100 per cent equity of the four blocks was not up to five billion barrels.
'Considering that the transaction at issue is not a sale of assets, it is inconceivable to arrive at any loss, not to mention the $15.72 trillion being propagated.
The revenue accruing from approximately 75 per cent of the total reserves that is due to the Federal Government remains unchanged and has not been eroded. Royalty and tax accruable to the federation account will be paid based on production', he added.
The statement also cleared the Minister of any impropriety in the deal, as it said as part of NNPC's policy, a thorough background check was carried out on Atlantic Energy Drilling Concepts, and there is no evidence indicating that the Minister has any direct or indirect pecuniary interest in the company. 'This allegation is therefore false, unfounded, and malicious and aimed at defaming the character of the person of the Minister of Petroleum Resources. It is expected that in issues as profound as these, the Delta State Oil Producing Communities should undertake a thorough, incisive, comprehensive investigation before making spurious allegations that are intentionally meant to tarnish the image of the Minister,' it stated.
In part, the statement said that NPDC, as a flagship subsidiary of NNPC is always seeking to expand its opportunities in the upstream oil and gas sector and in pursuing this growth strategy, NPDC has adopted funding mechanisms to secure production capacity of 250,000 barrels per day by 2015. 'This strategy', it said is essential if the National Oil Company (NOC) is to be a major player in the upstream sector in Nigeria and provide National Energy Security for the Nation.
The support of FGN in ensuring NPDC's expanded operations by seeking additional asset base and funding outside the normal Government funded Joint Venture (JV) cash call, is therefore an imperative and it has already yielded desired results as NPDC production has grown from 60,000 bbl/day to 138,000 bbl/day. Currently, NPDC is the major gas supplier to the domestic market in the western Niger Delta with over 450 mmscf/day which will further increase to over 550 mmscf/d by the end of 2013. We therefore urge all Nigerians to support the development of our own National Oil Company, to enable it compare with its peers (Petrobras, Saudi Aramco and Petronas) and to allow it compete favourably with other International Oil Companies (IOC),' it said.