FG stops probe of 2007 oil blocks sale

Details: Category: Politics; Published on Friday, 21 May 2010 07:38; Written by Tribune; Hits: 1769

THE Federal Government has suspended the ongoing investigation into the award of oil blocks carried out during the last days of former President Olusegun Obasanjo, The Will has reported.

The inquiry was instituted by the late President Umaru Yar’Adua in an effort to stop the downward trend in oil production by the introduction of industry reforms, to increase the declining revenue and achieve greater efficiency and transparency.

Investigation by The Will at the Department of Petroleum Resources (DPR), the industry regulator, and the Ministry of Petroleum Resources, indicated that the investigation into the 2007 oil licensing rounds was stopped and instead, attention had been shifted to how government would make this year’s round transparent.

It will be recalled that during the sale of the blocks in 2007, multinational oil companies that clearly held sway in the industry shied away from the offer of 45 blocks and only 18 were purchased by less known firms, alleging that the bid round was put in place as patronage to loyalists and supporters of Obasanjo.

Investigation further revealed that the truncating of the probe might not be unconnected with the fact that most of the approvals came from Obasanjo and continuing such probe by the present administration might turn out to be ‘biting the hand that has fed you’, said an industry player who pleaded anonymity.

The auction of 2007 was regarded by players in the industry as a last minute opportunity for former President Obasanjo to reward his loyal supporters.

The controversy that trailed the oil block auction claimed Tony Chukwueke, the Director of the Department of Petroleum Resources, who was asked by the oil ministry to step down pending an in-depth investigation into the round.

Some industry players said the halting of the investigation was necessary in order for government to be more focused in delivering the dividends of democracy apart from allowing foreign direct investment into the sector because of strains in the flow of oil revenue.

It will be recalled that Shell, one of the oil majors, said then that government risked undermining investors’ confidence after it asked Shell and ExxonMobil to pay almost two billion dollars ($2 billion) in unpaid taxes and revenues after a committee audited contracts for offshore oilfields signed 17 years ago.