The Nigerian government is at the centre of another unfolding oil scandal after awarding four Oil Mining Leases, formerly operated by the Addax Petroleum Nigeria Limited, to proxy firms linked to the Minister of State for Petroleum Resources, Timipre Sylva, and President Muhammadu Buhari’s nephew, Mamman Daura.
SaharaReporters learnt that the leases – OMLs 123, 124, 126 and 137 – all operated by Addax Petroleum Development Nigeria Limited – have been taken away and awarded to Kaztec Engineering Limited/Salvic Petroleum Resources Limited.
The consortium, (KEL/Salvic), is owned by oil magnate, Emeka Offor, who is a close ally of Sylva, Daura and the Director of the Department of Petroleum Resources, Auwalu Sarki.
The decision to hurriedly sell the OMLs was conveyed in a letter signed by the Director of the Department of Petroleum Resources, the industry’s regulatory agency.
SaharaReporters learnt that the re-award happened so swiftly after the revocation letter, in a matter of three days, leading to the Easter holiday weekend, a process which is quite unusual.
The key reason adduced by the state for the revocation was lack of compliance with work programme targets.
The properties are all producing assets on which royalties are being paid and revocation is hardly applied on for work programme issues, even though the government publicly frowns upon companies “sitting” on acreages without working them.
OMLs 123 and 124 were expected to expire in 2022 while OMLs 126 and 137 will expire in December 2024 and May 2027 respectively, according to the Nigerian Oil Industry Annual Report published by the DPR.
“Kaztec belongs to Emeka Offor; the Minister, Auwalu Sarki and Mamman Daura are all involved in the illegal deal. So also in the marginal field, Emeka Offor used three different names to get a lucrative field. He used Naphatha Petechemical’s name to get 91 per cent of Abiala filed, Starcrest to get 41.64 per cent of Atamba field and Naphtha to get 11 per cent of Egbolom field.
“Addax owes the Federal Government over $1.4 billion in tax and they have been in court cases since the minister decided to cancel and give it free to Emeka Offor.
“Offor is a close ally of the minister and he sponsored Sarki. Sarki was an Assistant Director and got promoted to director when the late Chief of Staff was outside the country,” a top source revealed to SaharaReporters.
“Just recently too, the DPR and the minister went against the approval of the President to award OML 110 that originally belonged to Cavendish Petroleum, due to the non-payment of renewal fee of $2million, to Bua Abdulsamad.
“The President in November 2020 through reference noSH/COS/24/A/9514 directed that DPR should return the block back to Cavendish, provided they pay within 90 days effective November 9. Instead of advising Cavendish, the minister through DPR awarded the block to Bua,” the source added.
The Nigerian government had dragged the Chinese-owned oil firm, Addax Petroleum Development Nigeria Ltd before the Federal High Court in Lagos over the company’s alleged under-remittance of $3 billion in taxes and royalties.
The government is claiming in the suit before Justice Mojisola Olatoregun that the sum represented outstanding claims against the oil company under the Petroleum Profit Tax Act and Petroleum (Drilling and Production) Amendment Regulation 2003 over Oil Mining Leases (OMLs) 123, 124, 126, and 137.
It also alleged the $3 billion unremitted funds came as a result of the oil multinational’s illegal and irregular reliance on Side Letters dated 21st November 2001, 20th December 2001, and 24th August 2004 which were never gazetted.
Apart from Addax Petroleum Development Nigeria Ltd, other respondents listed in the suit are: Addax Petroleum Exploration Nigeria Ltd, the Nigerian National Petroleum Corporation (NNPC), the Ministry of
Petroleum Resources/Department of Petroleum Resources, and the National Petroleum Investment & Management Services (NAPIMS).
The government is urging the court to grant an order directing the NNPC, Ministry of Petroleum/DPR, and NAPIMS from further allocation of crude oil explored from OMLs 123, 124, 126, and 137 to Addax Petroleum pending when the company furnishes the court verifiable bank guarantee from Nigerian banks to cover the monetary claims of the plaintiff.
The government is also seeking an order restraining the NNPC, petroleum ministry, and NAPIMS from dealing with Addax Petroleum as well as stopping them from transferring or assigning their interest in the OMLs to another person.