The Senate on Wednesday mandated its Committee on Petroleum Resources (Upstream) to investigate issues relating to ongoing lease renewals in the oil and gas sector of the economy.
It is believed that the process is being undertaken by the Minister of State for Petroleum Resources, Dr Ibe Kachikwu, and the Department of Petroleum Resources (DPR).
The resolution followed consideration of a motion by Sen. Omotayo Alasoadura (APC Ondo) and three other senators.
The motion was entitled “Irregularities in Ongoing Oil and Gas Lease Renewal and Massive Loss of Government Revenue.”
Leading debate on the motion, Alasoadura said that the Committee on Petroleum Resources had since December, 2017 been inundated with petitions and complaints over alleged multiplicity of irregularities surrounding the renewal of oil and gas leases.
He said there were also allegations that Kachikwu was granting illegal discounts and rebates in the exercise.
Alasoadura added that “the action of the Minister of State is capable of short-changing the country and denying the Federation the appropriate revenue accruable from the renewal of the leases.
“The Minister and the Department of Petroleum Resources were proceeding to renew leases of companies that had brazenly and illegally refused to pay royalties from oil and gas lifted by the companies in contravention of extant laws.
“Under the provision of extant laws, failure to pay royalties is a ground for revocation of leases and a legal barrier to renewal of applicable leases.
“There is a subsisting legal framework and due process mandated by extant law for the renewal of leases that are due,” he said.
According to him, the alleged irregularities are capable of denying government revenue in excess of 10 billion dollars as a result of illegal discounts and rebates in the process of lease renewal.
The lawmaker said that efforts by the senate committee to engage DPR on the matter failed.
According to him, the Department of Petroleum Resources wilfully and deliberately refused to provide the committee with relevant information and data related to the lease renewal.
“There is need to thoroughly investigate the lease renewal in view of the potentially alarming impact this will have on government in terms of loss of revenue accruable to the federation.”
In his contribution, Sen. Shehu Sani (APC-Kaduna) said that the motion was an indication of the rot in the oil and gas industry, adding that 10 billion dollars was huge revenue that the country could not afford to lose.
“From the substance of this motion, it is very clear that the Minister of State has in every possible way been engaged in acts that contravene the law.
“Over a year ago, he wrote an open letter raising issues about transparency and impunity in the oil sector.
“The issue of lease is something that has been on the front burner of national discourse in the last few weeks.
“What this parliament can do is to once and for all bring the minister to make clarification on the actions he has taken as 10 billion dollars is no small amount of money.
“I am of the belief that if we can get to the root of this matter, it will also open other cans of worm,” he said.
Sen. Rafiu Ibrahim (APC Kwara) stressed the need to expand the investigation.
“The President is the Minister of Petroleum Resources, maybe that is why this motion is not mentioning the Minister of Petroleum Resources.
“We are aware that the Minister of State ordinarily does not have the final approval for this type of case.
“There is a Board of NNPC and the Ministry and it is out there, though yet to be substantiated that the Chief of Staff to the President is a member of the board and is literally in charge of the board and the ministry.
“I will just want the prayer to expand those to be called in the investigation.”
In his remarks, Deputy President of the Senate, Mr Ike Ekweremadu, who presided at plenary, charged the committee to carry out thorough investigation on the issue.
He stressed the need for proper oversight by the committee, adding that “what matters most in cases like this is transparency in our oversight functions”.
Ekweremadu called on regulatory and enforcement agencies to discharge their responsibilities with a view to ensuring transparency in governance irrespective of those involved.