N3b Scam: DPR and Harrowing evidence of Fraud




When the Department of Petroleum Resources (DPR) at a meeting with the Senate Committee on Gas Resources in Abuja accused International Oil Companies (IOCs) of frustrating the efforts of the Federal Government to monitor and measure the amount of gas produced at every given time, the agency must have meant to ask that it be scrapped immediately for gross incompetence in doing what it was set up for.

In 2009, DPR awarded a contract for the installation of Real Time Gas Monitoring meters at specified production points. This involved the design, procurement, installation and commissioning of a system that will facilitate the remote monitoring of volumes of produced natural gas, in real time, from facilities operated by multinational oil and gas companies in Nigeria. This contract which was part of government’s efforts to separate natural gas from oil production to generate additional revenue was meant to last for nine months. But almost four years after, only 8.3 percent of the contract has been executed.

As revealed, the level of project completion between 2009 and 2010 recorded only three percent, while in the same project from 2010 to 2011 attracted 5.3percent milestone, making a total of 8.3percent completion.

Out of 116 installation sites, only 10 have been installed with the monitoring gadget. The reason as given by the managers of Riverman Technologies, the DPR contractor was that, “The IOCs do not give us permission to carry out evaluation in their sites. Where evaluations are done and engineering report sent to them, they do not get back to us. And that has been a major setback for us.”

The major culprits in this regard as alleged are Shell Petroleum Development Company of Nigeria Limited (SPDC); Chevron and ExxonMobil. Out of the 116 sites, Shell owns 70 locations. None of the locations have been installed with the equipment.

This is the harrowing gist of the fraud: As gathered, the original contract value was N1billion. In 2009, N812 million was appropriated for the project; in 2010, N632 million; in 2011 N452 million; and in 2012, N700 million was appropriated.

For four years running, budgetary allocations had been made for the same project. So how would you expect the not-very-honest administrators of DPR to put pressure on the IOCs to allow the contractor do his work when every year they get almost the net worth of the contract?

What has happened to our conscience in this nation? This is just one of the harrowing things happening in government- control of the nation’s oil and gas industry.

The very powerful regulator of the oil and gas industry gave out a contract that has a time-line of nine months and in three years only 8.3 percent of the contract was executed. Meanwhile, this regulator has blown almost three hundred and fifty percent of the original contract value to achieve only 8.3 percent. You see the warped mindset on parade by people in authourity! And for how long can we continue like this as a nation?

Shell in their response raised an important issue of competence as they alleged that Riverman Technologies Ltd, the DPR contractor “appeared not to have the capability and capacity to handle such contract, hence the delay.” Why should DPR award such sensitive contract to an incompetent company? The answer is corruption and fraud-inspired favouritism.

Even the DPR director at the Senate presented the contractor as grossly incapable of carrying out the assignment.

Hear him: “The companies would need to shut down operations to allow the contractor to survey and design the appropriate technology to be used, but they were not willing to do that.” So DPR expected the IOCs to shut down their operations so that its contractor can work? Is it possible? No wonder Shell alluded that the contractor lacks the capability and capacity to handle the project.

The entire management of the DPR should be ashamed of their service to this nation and honestly accept their incompetence or rather insincerity and lack of will -power to be honest in the service for which they are lavishly paid. If the IOCs refused to obey the DPR’s order to allow the contractor do this all important job, who would they obey?

It was an outright nonsense to accuse the IOCs, particularly Shell of using “some techniques to slow down the installation of the real time units that would give accurate measurement of gas production and utilization in the country.” These IOCs are here to make “unholy” profit from where they operate and protecting your national interest to them is of zero priority. And of course this was one of the major reasons government established the DPR to police the operators and ensure the right things were done to serve and protect the interest of the nation. Now the agency that was supposed to be the strong arm of government -control in the oil and gas industry has turned a lame duck just because of corruption. This is pathetic indeed! The excuses adduced by the DPR for the abysmal performance in this vital project could only be accepted in a tombo (palmwine) bar.

Gas production in Nigeria has been deliberately played down by the IOCs to the detriment of revenue derivable from it. How do you know the quantity of gas being produced and utilized without real time monitoring? As rightly said by the Chairman of Senate Committee on Gas Resources, Nkechi Nworgu, Nigeria should know how much gas that is produced and utilized so that if the oil companies have not been paying accurately, we can compelled them to do so.

For years there has not been a standard measurement of the volume of gas produced and utilized in the country. DPR has so far depended solely on what the IOCs tell them to peg the volume of gas produced and utilized in the country. And if the DPR does not know, it means Nigeria does not know with exactness the quantity of natural gas the IOCs are taking away from the country. These companies just give you any figure they so wish. How long can we continue like this as a nation?



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