Nigeria earns US$1billion from renewal of 22 oil blocks
President Muhammadu Buhari, Nigeria’s substantive minister of petroleum resources, has approved the renewal of 22 expired and expiring oil blocks, from which the Department of Petroleum Resources (DPR) realised about US$1 billion for the government.
The approval for the renewal of the 22 expired and expiring oil blocks came few weeks after the House of Representatives claimed that the DPR had renewed expired oil blocks under dubious circumstances, and subsequently realised US$10 billion – an allegation the DPR roundly denied.
Holders of 25 oil blocks had filed applications for renewal but 22 were approved by Mr Buhari after the DPR’s reviews. Sources in the DPR and petroleum ministry confirmed the development to on the 27th January in Abuja.
They explained the renewals were done under an ‘accelerated lease renewal programme initiated by the DPR to raise revenue for the government and incentivise operations in the country’s upstream oil and gas sector.
An official of House of Representatives mandate to its Committee on Petroleum Resources (Upstream) said “The allegation is totally unfounded; how do you determine there are irregularities. From the DPR point of view, government came up with an accelerated revenue generation drive and to align with that drive, the DPR came up with an accelerated lease renewal programme which is hinged on the positions of the Petroleum Act LFN (law of the federation) 2004.
“The Act mandates the holder of oil mining lease to apply for renewal of lease at least a year to expiration of lease. Based on that the department came up with the accelerated lease renewal programme to process renewal applications which are due to expire between 2016 and 2019 window,” said one of the official sources.
Another source who provided a deeper insight on the development, stated that: “A total of 45 leases between the joint ventures and IOCs fell within this period (2016 and 2019), and 25 applications were received in this regards, and they had gone through rigorous statutory regulatory reviews and submitted for ministerial approval.
“The minister of petroleum resources who just happens to be the president has granted approval for about 22 of them which has generated renewal bonuses in excess of US$1 billion to the government. So, where did the US$10 billion the House of Representatives say they are losing come from?
“All others are at various stages of processing and in addition they also pay US$1 million revised application fee per block. The process is transparent and straightforward.”
The DPR in an official statement confirmed that it used the accelerated early lease renewal programme to rake in US$1 billion from the renewal of 22 oil blocks.
It also said that its execution of its job in the industry was guided by the Petroleum Act, and that the government was proud of its efforts so far in this regard.
Source: Energy Mix Report