The Senate, in plenary session on Wednesday, constituted an Ad Hoc Committee to investigate the Shell Petroleum Development Company (SPDC) for breach of the Petroleum Law and violation of the Joint Venture Agreement entered into with the Federal Government.
The ad hoc committee was mandated to investigate the oil mining lease granted to SPDC between 1959 and 1989, and between 1989 and 2019 under the joint venture agreement of SPDC and NNPC.
The committee, constituted by the president of the Senate, Ahmad Lawan, is chaired by Sabi Abdullahi (APC-Niger).
Other members include George Thompson Sekibo, (PDP-Rivers) Abdullahi Yahaya, (PDP-Kebbi) Bassey Albert Akpan, (PDP-Akwa Ibom) Solomon Adeola, (APC-Lagos) Smart Adeyemi (APC-Kogi), and Aishatu Ahmed. ((APC-Adamawa).
The Senate required the federal government to repay $200 million and any amount less than SPDC paid, including penalties and interest under the leases.
The resolution was reached after considering a motion sponsored by George Sekibo (PDP-Rivers).
The motion titled: “Failure to pay the sum of 200 million dollars accrued from the Oil Mining Lease (OML), by Shell Petroleum Development Company of Nigeria Limited under the SPDC/NNPC Joint Venture Agreement.
“And, the unlawful and unlawful renewal of Petroleum Mining Leases by the Ministry of Petroleum Resources/Department of Petroleum Resources (DPR) contrary to the provision of paragraph 10 of the First Schedule of the Petroleum Act 1969 (now Section 86 (1) and 86 (6) of the Petroleum Industry Act of 2022.”
Mr. Sekibo, in his main discussion, pointed out that the Joint Venture (JV) agreement contravened the provisions of the Petroleum Act of 1969, by the former Department of Petroleum Resources (DPR) and the Ministry of Petroleum Resources, granted to SPDC. , NNPC a 30-year Oil Mining Lease from 1959 to 1989.
It noted that doing so constituted an illegal extension of the Petroleum Mining Lease for 10 years in the first instance, rather than the prescribed 20-year term, without recourse to the provisions of the 1969 Petroleum Act in paragraph 10 of the First Schedule.
He said that upon expiration of the initial Oil Mining Lease in 1989, SPDC and NNPC JV, again received another 30-year Oil Mining Lease from July 1, 1989 to June 30, 2019, from the Ministry of Petroleum and DPR instead of the 20-year lease prescribed by the Petroleum Act.
This, he said, is contrary to paragraph 10 of the First Schedule of said law.
It revealed that in the initial 10 additional years of the Petroleum Mining Lease from 1969 to 1989, illegally granted to SPDC and NNPC JV by the Ministry of Petroleum Resources and the DPR, the federal government lost the sum of 120 million dollars.
He indicated that in the second instance of the additional 10 years, the federal government also lost an additional sum of 80 million dollars, adding a total of 200 million dollars.
He said the $200 million loss, which was equal to N83.130 billion, could have been of great value to the nation’s economy.
He expressed his concern that the trend of illegal extension of the Joint Venture (JV) period from 20 years to 30 years of lease period without recourse to the Petroleum Law may also have been applied to other Joint Venture agreements with International Oil Companies. (IOC) and the need to be investigated.
Revealed that a whistleblower petitioned the EFCC about the need to recover the SPDC fund for the illegal extensions by the Ministry of Petroleum Resources, DPR and to further investigate all other Joint Venture deals involving the aforementioned IOCs. .
He pointed out that the power to make laws for the federation, as granted by the Constitution to the National Assembly, also encompasses the power to make laws for the promotion of national prosperity and a dynamic self-sustaining economy, as provided in section 16( 1)(a). ) of the 1999 Constitution of the Federal Republic of Nigeria as amended.
He said that the Constitution also grants powers to the National Assembly to carry out the corresponding investigations on the improper application of the laws promulgated by the National Assembly, as provided in article 88 of the Constitution.