House C’ttee Queries CBN, Others over Royalties, Signature Bonuses Paid for Oil Blocks

  • NNPC to provide 25 years PSC remittance records to N’Assembly

Damilola Oyedele and Chineme Okafor in Abuja

The House of Representatives ad hoc committee on Oil Prospecting Licences (OPLs) and Oil Mining Licenses (OMLs) has queried the Central Bank of Nigeria (CBN) on the status of payments of royalties, signatures bonuses and others fees in respect of several oil blocks by the beneficiaries.

Other agencies queried by the committee included the Department of Petroleum Resources (DPR), the Nigerian National Petroleum Corporation (NNPC), and the Office of the Accountant General of the Federation (OAGF).

This is as the committee issued a one-week ultimatum to the apex bank and the agencies to submit all relevant documents related to transactions on the OPLs and OMLs.

The Chairman of the Committee, Hon. Gideon Gwani (Kaduna PDP), at the continuation of hearing yesterday lamented that it remained unclear where the accounts pertaining payments on the OPLs are domiciled.

“The meeting by the committee with relevant agencies would enable the committee trace the accounts where fees have been lodged, how much have been paid and by whom, what company has paid and who has not, if such payment have actually been received by the government or not, as well as the balance if any,” he said.

‘…And we wrote DPR, give us this information, we want to trace if these monies got into your account or not. DPR also informed us that they wrote to CBN, two or three different letters and copied us the letters, because we started harassing them, that you people are refusing to give the information. They said the information is not with them, its with CBN,” the lawmaker added.

Hon. Diri Douye (Bayelsa PDP) said documents submitted by the DPR and the Office of the Accountant General of the Federation have contradictory claims, as while the former claimed Cone Oil (beneficiary of OPL 257) has paid $100 million, the latter claimed the same money is missing.

“There are several contradictions contained in the document submitted to us by DPR and AGF and we must get to root of this matter. That is why we have asked the CBN to provide us with the statement of accounts of the DPR so we can be sure we got the right document from DPR,” Douye said.

The Deputy Governor (Operations) of the CBN, Mr. Adebayo Adelabu, said the apex bank was surprised when it received letters requesting details of licensing fees, royalties and rents for the OPLs and OMLs, as it can only provide bank statements.

“…We said how would we even know these details of payment. Which is why we deliberately responded that no, we were not NNPC, we were not DPR, we would not know what payments came into their accounts. Go to them get the details, but they now asked for evidence of payments which is bank statements and we said, that is the right thing to ask for,” Adelabu said.

“Immediately we got the request, we contacted JP Morgan. We have an internal retention policy of seven years. We are in 2017 and they said that after seven years, they destroy the records. What we have done is to resort to our internal records and we have sent people to our archives to try and dig out this statements which JP Morgan cannot provide for now,” he added.

The Chief Operating Officer of the NNPC, Mr. Rabiu Bello, in his submission, said all fees regarding the OPLs and OMLs were paid into a central account in CBN.

“When they produce oil, the functional of that oil that is called royalty is lifted by NNPC, but paid into a central account in CBN given by the DPR. So that is the role of the NNPC in that discussion, but rent, fees, and all other fees are not taken care of by NNPC,” Bello said.

The committee’s mandate is to determine whether the award of all OPLs and all OMLs by the federal government, followed due process, and whether guidelines for the acquisition of oil and gas assets, were followed.
However, the NPPC has said it would provide records of the royalty remittances from Production Sharing Contracts (PSCs) it made to the DPR from 1992 till date to the National Assembly.

A statement from the corporation in Abuja said its Group Managing Director, Dr Maikanti Baru, said this when he spoke on the role of the NNPC in crude oil revenue collection processes at the committee hearing.
The statement was signed by its Group General Manager, Public Affairs Division, Mr. Ndu Ughamadu, who also said Baru was represented by Rabiu.

He said the NNPC was not involved in the collection of signature bonuses paid by oil companies to the federal government upon their successful bid for oil blocks, but the DPR.

Baru stated that existing arrangement allowed the NNPC to lift the royalty oil from PSCs and remit the proceeds to the DPR. He added that confirmation and reconciliation of royalty payments to the sister agency were carried out at the monthly meeting between the OAGF and revenue generating agencies.

The statement said the Chairman of the ad hoc committee Gwani, said the committee decided to invite all the agencies involved in the collection of oil revenues and the CBN to resolve the claims and counter-claims regarding the whereabouts of some signature bonuses and other revenues from some OPLs and OMLs.

He explained that the committee was mandated by the House of Representatives to investigate the award of all OPLs and OMLs granted to oil companies by the Federal Government, to among other things, ascertain whether due process and guidelines for the acquisition of oil and gas assets were complied with.

The statement added that other agencies invited for the hearing included the DPR, CBN, Office of the Accountant General of the Federation and the Petroleum Training Development Fund (PTDF).