Worried about corrupt practices in the nation’s oil sector, Human Environmental Development Agenda (HEDA) Resource Centre has charged government to tackle the alleged weak licensing in the petroleum industry.

At the public presentation of ‘Spotlighting the oil and gas: A Review of the 2020/2021 Marginal Field Bid Licensing Round in Nigeria’, HEDA chairman, Olarewaju Suraju, yesterday, noted that corruption, arbitrary decisions and other issues remained prevalent in the country’s bidding process.

He said there exists arbitrary lumping of strange bedfellows into same Special Purpose Vehicles (SPVs) without regard to capacity and previous experiences in proposing or awarding share percentages and structure of governance, funding and profit-sharing formula for them.

Suraju acknowledged the delays precipitated by the COVID-19 pandemic and transition from Department of Petroleum Resources (DPR) to Nigerian Upstream Petroleum Regulatory Authority (NUPRC) in compliance with institutional and operational provisions in the (Petroleum Industry Act (PIA) 2021, and the resort to institute a committee to clean up the mess created under the DPR regime, leveraging the Alternative Dispute Resolution Centre (ADRC).

The HEDA chair observed: “Allegations of undue access to insider information by some privileged persons that complemented already available Competent Person Reporting (CPR) and Net Person Value (NPV) reports to reach decisions about whether to top-up a nearly sealed bid to swing awards or simply walk away.

“Hush-talks about official and unofficial payments by bidders, all of which happened only at the level of allegations without any official records or petitions.

“High fees and levies charged which warranted a drop in the number of shortlisted applications and mergers/SPVs formed by companies.”

According to him, Nigeria and its upstream oil regulatory agency can conduct a bid round without recounting clogs of corruption scandals that have painted the country in bad image and construed licensing as weakest link in its oil and gas industry governance.

Suraju continued: “Political interference by the Minister or Minister of State of Petroleum Resources can be mitigated with their undue and overbearing powers of discretion in allocating oil blocks curbed to allow for professional and business-driven interest.

“Capacity of NUPRC to mediate and reconcile such disputes and conflicts of equity negotiation, governance structure, funding and profit-sharing formula as demonstrated in the conflagration occasioned by the SPVs created out of co-joined fields is no longer in doubt.”

In the report, the group recommended full disclosure of information at all stages of the Bid Licensing Round (BLR) from the very beginning of expression of interest up to the issuance of certificate of award to avoid peddling of real or imagined allegations about happenings of untoward practices by stakeholders, particularly civil society, which felt undermined and disregarded in the entire process.

It added: “More specifically, information comprising names of companies that expressed interest for which blocks/fields, names of their owners, amount of money paid, processes scaled through or fell behind, plans for host community development and contract transparency should be prioritised.

“Broader stakeholders’ buy-in and respect for independence of investors/companies to determine who they merge with and with whom they formed SPVs and the level of equity participation and profit-sharing formula should be guaranteed, instead of forcing a merger of strange bedfellows.

“Deliberate efforts by NUPRC to promote stakeholders’ collaboration to realise the central goal and objectives of every oil bid licensing round, while they collectively act as checks on one another for the overriding interest of the country’s economic growth and development.

“Cross-institutional checks for key public policy and legal provisions such as beneficial ownership and contract transparency are recommended in strict collaboration with civil society. It is not just enough to claim transparency, it is also necessary for stakeholders to see that procedures are undeniably followed.”