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Confusion for Kachukwu, DPR as Reps begin probe of oil, gas lease renewal

For observation of alleged irregularities in the ongoing oil and gas lease renewal under the watch of the Minister of State for Petroleum Resources, the House of Representatives has adopted a resolution to investigate Dr Ibe Kachukwu.
Apart from the Minister, the lawmakers will also extend their dragnet to the Department of Petroleum Resources (DPR) on the said allegations.
Trouble had started from a motion by Rep Chika Adamu (APC-Niger), at the plenary presided over by the Speaker, Mr Yakubu Dogara, in Abuja.
In the motion, Adamu had expressed worry that the Federal Ministry of Petroleum Resources and the DPR were allegedly renewing leases of companies that had failed to pay royalties to the government from oil and gas lifted.
He hinted that “The House notes that the Committee on Petroleum Resources Upstream, in December 2017, observed irregularities in the ongoing renewal of oil and gas leases being undertaken by the Minister of Petroleum Resources, Dr Ibe Kachikwu, and the Department of Petroleum Resources.
“It also notes that the Minister of Petroleum Resources is allegedly granting illegal discounts and rebates in the process of the ongoing renewal of leases.
“The House is aware that under the provisions of extant laws, failure to pay royalties is a ground for revocation of leases and a legal barrier to renewal of applicable leases.
“It is worried that the Federal Ministry of Petroleum Resources and the Department of Petroleum Resources are allegedly renewing leases of companies that have failed to pay royalties to the government from oil and gas lifted by the said companies, which is in contravention of the extant laws.
“The House is concerned that the Ministry of Petroleum Resources and the Department of Petroleum Resources have deliberately, willfully and brazenly flouted the subsisting legal framework and due process mandated by extant laws for the renewal of leases,” he said.
The lawmaker noted that the irregularities being perpetrated by the ministry and DPR in the ongoing lease renewal process is capable of denying government revenues in excess of $10 billon as a result of illegal discounts and rebates granted in the process of lease renewal.
Adamu disclosed further that DPR made matter worst when it failed to provide the Committee on Petroleum Resources (Upstream) with relevant information and data related to the ongoing lease renewal.
In line with House proceedings, the House agreed to thoroughly investigate the ongoing lease renewal being undertaken by Kachikwu and the DPR to ascertain the reasons for the anomalies observed.
With voice votes, the Speaker, Yakubu Dogara ruled that the Committee on Petroleum Resources (Upstream) to investigate the matter and report back to the House within four weeks for further legislative action on the matter.
The resolution did not order a stop to the renewal process.
However, the DPR and the ministry have denied any form of irregularities in the process, saying “The accelerated early lease renewal programme is a process ingeniously developed to expand and speed up earning potential from the renewal programme for the government and to create security of title to leaseholders to allow them to continue the massive investments needed to improve production from their fields.
“The programme is hinged on the provisions of the Petroleum Act LFN 2004, which mandates the holder of an Oil Mining Lease to apply for a renewal of the lease at least one year to expiration and this has enabled the receipt, processing and approval of 22 OMLs, which has resulted in payment of renewal bonuses in excess of $1bn.”
The Ministry and DPR claimed that the lease renewal process starts with an application to the DPR from the leaseholder and subjected to rigorous statutory regulatory process before transmission to the Minister of State for review and a recommendation to the President for final approval.
“The Department of Petroleum Resources and the Ministry of Petroleum Resources are looking forward to the advertised invitation from the House of Representatives and as always, we will be available to clarify any misunderstanding the House may have on the renewed leases as part of normal oversight functions of the House.