Reps begin probe on alleged $21 billion crude oil loss

An ad-hoc committee of the House of Representatives yesterday, launched a probe into alleged loss of crude oil in Nigeria worth $21 billion.

The House has therefore directed the committee to investigate within four weeks debts owed indigenous companies by International Oil Companies (IOCs).

Speaking at the inauguration, the chairman of the ad hoc committee, Daniel Reyenieju, said the committee would be exhaustive in determining the reason for the loss.

“We are expected to investigating the operations of the deep offshore and Inland Basin Production Sharing Contracts Act (PSC) as it concerns the Nigerian National Petroleum Corporation (NNPC) and the IOCs towards determining the reasons for the loss of $21 billion.”

He said the committee would also find out why appropriate steps were not taken over a long period to remedy the situation leading to the alleged loss and possibly recover the revenue.

Reyenieju said the second term of reference was to investigate the debts owed to local companies and indigenous contractors by IOCs and gas companies with a view to ensuring they were paid.

The Minister of State for Petroleum Resources, Ibe Kachikwu, is expected to provide the committee with details of financial transactions between the NNPC and IOCs during the period in view.

“We shall review the PSC, the joint operating agreement and other relevant agreements, with the view to regularising all anomalies that might have led to loss of revenue,’’ the committee said.

The ad hoc committee has therefore invited local companies being owed by the operators to furnish it with details of their respective transactions or contracts.

The House of Representatives had in January set up the ad hoc committee to investigate alleged huge debts being owed local companies and indigenous contractors by International Oil and Gas Companies.

It also mandated the committee to ensure that such debts were paid promptly.

This followed a motion by the chairman of the house Public Accounts Committee, Kingsley Chinda.

Meanwhile, the Minister of State for Petroleum Resources, Ibe Kachikwu, has said crude oil may no longer hit $100 per barrel in the international market, except there was a huge calamity in the producing regions.

“Oil is not going to be $100 per barrel again except there is a huge calamity in the North Korea peninsula and whatever. So, we are likely to continue to stay depressed at $60 – $70, but even at that, that is a huge movement, coming from where we were,”

Kachikwu who spoke at the Samsung Yard in Lagos, where the $3.3 billion Floating Production Storage Offloading (FPSO) unit is being integrated by Samsung Heavy Industries (SHI) at LADOL Free Zone, argued that such situation could not happen, “What it says to us as a country is that Nigeria should begin to look at its priorities differently”.

“We are going to look at what is the net value for the country in these future projects. We are not, as a country, very impressed with the PSCs we put together. We lose a lot of money in the contracts,” he added.

The minister, said that only oil and gas projects that have huge net value to the Federation Account will henceforth be sanctioned by the Federal Government, adding that, it was no longer needful for IOCs to develop multi-billion dollar projects that will not attract payment of royalties to the government.