“37 Oil Firms Owe Nigeria $515million Signature Bonus” – DPR

The Department of Petroleum Resources, DPR, on Wednesday, June 1, told an Ad-hoc Committee of the House of Representatives probing Oil Prospecting Licences, OPLs, and Oil Mining Leases, OMLs, granted by the Federal Government that 37 oil firms owes the country $515,870,250 in signature bonuses for oil blocks licenses won during the 2005, 2006 and 2007 bidding rounds respectively.

In his presentation to the committee under the chairmanship of Gideon Gwani on the first day of a two-day investigative hearing, DPR’s head of basinal assessment and lease administration, Sunday Babalola, said $255,120,000, $155,120,000 and $105,750,250 are outstanding signature bonuses for the same periods respectively.

The DPR presentation revealed that in 2005 bid round – 65% indigenous and 35% foreign oil firms participated; in 2006 bid round – 40% indigenous and 60% foreign oil firms participated; and in 2007 bid round – 85% indigenous and 15% foreign oil firms took part in the exercise.

However,when the Ad-hoc committee demanded to know what the DPR was doing on the outstanding money being owed the Federal Government, Babalola said: “Many times we have written to the government to take action.”

On the status of oil blocks as at May 31, 2016, the DPR official told the lawmakers that there were 109 OMLs, 75 OPLs and 208 open blocks.

He added that an OML is granted through the conversion of OPL and a relinquishment of 50% lease after 10 years of grant and OML but that some oil firms have refused to give up the 1/2 lease as required by the law.

Babalola was however quick to point out that 16 OMLs directly granted to the Nigerian National Petroleum Corporation (NNPC) are exempted from the 50% relinquishment in line with section 20 of the NNPC Act, 1990, adding that three leases’ relinquishment process has been completed, one was granted waiver while 11 leases’ relinquishment process was ongoing.

On critical projects to be invested on by the beneficiary oil firms, the DPR official said: “Unfortunately, none of the strategic projects is on course.”

While on the issue of awarding an OPL to a company other the one that won the bid, Babalola said the DPR has noted the committee’s observations and will make a submission on the matter in seven days.