Energy

Oil Blocks Renewal: Policy Alert, HEDA, CISLAC, 19 other CSOs Task FG on Openness, Beneficial Ownership

By Editor

Policy Alert, Human and Environmental Development Agenda (HEDA), Civil Society
Legislative Advocacy Centre (CISLAC) and 19 other civil society organizations have called on the federal government to ensure that “the highest standards of transparency, competition, fairness and accountability are applied across the entire process of re-awarding or renewal of currently expired and about-to-expire oil block licenses in the country”.

In a statement issued in Abuja this morning, the groups stated that openness should “cover all stages of the contracting process, namely the planning, allocation and award, as well as information about contract terms and their implementation.”

The statement read: “According to the Department of Petroleum Resources (DPR) 2017 Oil and Gas Industry Annual Report,1 a total of 42 oil block licenses held by international and indigenous oil companies are due for renewal in the year 2019. The licenses consist of 35 Oil Mining Licenses (OML) and seven Oil Prospecting Licenses (OPL), some of which have already expired between August and September, while others are due to expire
this October.

“Nigeria has lost billions of dollars in potential revenue due to the continued refusal of government to conduct an open and competitive bid round for oil blocs in the country. The country especially missed the opportunity of conducting a licensing round during the oil boom years of 2010 to 2014. In the last 12 years, no competitive oil licensing round has been held for Nigeria’s oil blocks, and even those before that period were riddled with controversy. The executive discretion, cronyism and lack of openness that have characterized decision-making around the award of blocks over the years have driven down competition, fuelled massive corruption and adversely affected returns to Nigeria from the sector.

“The expiration of these licenses therefore provides a critical opportunity to emplace
mechanisms that will guide the future management of the sector so that Nigeria can begin to benefit fully from her natural resource wealth and translate same to better development outcomes for citizens.”

The statement further noted that contract transparency is now a key requirement of the Extractive Industries Transparency Initiative (EITI)2, of which Nigeria is a leading implementing country, and aligns with Nigeria’s open contracting commitments at the 2016 UK Anti-Corruption Summit and via the Open Government Partnership (OGP).

The civil society groups are demanding, among others, that the Federal Government discloses “the overall rules for the various license award processes including timelines and application requirements, and clear technical and financial criteria against which companies are being assessed, and information about appeal processes”, “publish the names of all the companies applying for the oil and gas prospecting and mining licenses,
including during prequalification” and “request and publicly disclose information on the Beneficial Owners of bidding companies and use this information to screen applicants for conflicts of interest and corruption risks and to possibly flag the dominance of certain interests in the ownership of Nigeria’s oil blocks.”

Speaking to journalists in Abuja at the presentation of the statement on behalf of the CSOs, Tijah Bolton-Akpan, Executive Director of Policy Alert, said: “In the near term, we’re hoping that implementing our current demands will help to improve competition, deter fraud and corruption, build confidence among investors and citizens, and promote a more competitive and enabling business environment. An open and competitive licensing round will also ensure that Nigeria obtains a better deal for its oil and will enable stakeholder oversight towards the translation of resource wealth into prosperity for citizens.”

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Categories: Energy, Nigeria

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