The House of Representatives, on Tuesday, resolved to investigate the Nigerian National Petroleum Company Limited (NNPCL) and a multi-national oil company, AGIP, over allegations of fund diversion and failure to pay $72 million debt to a Nigerian company, Decoon Services Limited.
The lawmakers resolved to look into the matter after it received a petition from a
non-governmental organisation (NGO), Centre for Social Justice, Equity and Transparency (CSJET), laid before the House by its Deputy spokesman, Hon. Philip Agbese.
In the petition dated April 24, 2024, the Executive Director, CSJET, Com. Joshua Abah, asked the National Assembly to use its powers as conferred on it by Section 88(1) and (2) of the Constitution of the Federal Republic of Nigeria 1999 (As Amended).
He explained that the current case involved the alleged fraudulent diversion of funds in the sum of seventy-two million US dollars ($72,000,000) by Nigerian Agip Oil Company Limited and Mr. Mele Kyari, the Group Managing Director of NNPCL, owed to De Coon Services Limited, a Nigerian Oil and Gas servicing company rendering services to all operators in the industry in Nigeria.
Explaining the facts giving rise to the petition, he said, “De Coon Services Limited (DSL) executed the Caterpillar General Maintenance Contract (GMC) with NAOC that includes routine Operations and Maintenance, provision of spare parts, and overhauls of all their dedicated production gas/diesel generators—a stop-gap contract which started in 2010 and ended in 2018, However, after the said tenure of the stop-gap contract, NAOC was owing DSL over Twenty-two Million Dollars, which they refused to redeem, irrespective of the fact that their JV partners (NNPC) had paid cash-calls relating to this contract to NAOC. Succinctly put, NAOC criminally and dishonestly converted the cash-calls to themselves in total breach and defiance of the agreement to pay DSL upon conclusion of the contract and receipt of the cash calls from its Joint Venture partners.”
The group also said, “DSL also won the replacement contract for the same contract in 2014, but NAOC delayed the award until 2018, hence the reason for ending the stop-gap contract in 2018 and commencing the replacement contract forthwith. Although NAOC was owing DSL over $22M by this time, NAOC moved to commence the replacement contract. DSL objected and demanded that a reconciliation meeting be held to settle the outstanding bills or at least put in place a mechanism for paying these debts, but NAOC refused. DSL reported this situation to NCDMB and NUIMS (NAPIMS), while NCDMB commenced an investigation on this. The NUIMS (NAPIMS) officers responsible at the time connived with NAOC to criminally commence the replacement contract without doing the needful. DSL has all the evidence to prove this claim. Notwithstanding all these financial irregularities, NAOC instituted a tender for contracts for the provision of gas generators at Samabiri Flow Station and the provision of three gas generators at Brass Terminal. However, NAOC rigged the tender processes by awarding the same to RCE Overseas Ltd, which was not the lowest bidder, in clear violation of the PPA 2007.
To curtail the contractual infractions, Abah stated that DSL reported the issues to the House of Representatives Committee on Public Petitions, but Mr. Kyari allegedly compromised the committee’s chairperson, Hon. Jerry Alagboso.
Consequently, DSL took the matter to the House Committee on Petroleum, alleging that Mr. Kyari also compromised the chairperson of the panel, Hon. Musa Sarkin Adar, and the chairperson approved Kyari’s request for the Committee to discontinue the investigation and allow him to handle the matter internally.
The group, therefore, urged the federal lawmakers to implement the recommendations of the NNPC’s GRC, NAPIMS & NCDMB reports as regards the matter.
They also urged the lawmakers to direct NAOC to pay all debts owed to DSL.
This, they said, can be in installments ans as shall be agreed by all stakeholders.
Abah said, “The Total amount now is above $70M as DSL rental equipment are still with NAOC and their daily rates are still counting till date. To allow DSL to continue their work as the contract is a NIPEX contract and as such DSL can only be replaced with a winner of a Nipex conducted replacement tender and in this case, there is none yet so DSL contract should continue unless the services are no longer required in line with the GRC’s recommendation.
“The adequate payments thereof as contained in the contract since DSL complied with partners signed the FAT reports in the factory without any complaints. This is also in line with the GRC’s recommendation. Award all the other Nipex contracts DSL won to DSL including the COMPRESSOR GMC and Irri G3508 Generators supply contracts DSL won about two years ago but were withheld as punishments for not agreeing to the meagre amount NAOC wanted to pay DSL as a one-off payment for the huge amount owed to DSL.
“Restore all the other contracts illegally taken away from DSL including the Agrisaba Contract & the NAOC Port Harcourt Power-House maintenance contract. Include DSL as one of the awardees for the ESP Contract as they were one of the bidders that passed the technical phase of the contract but were arbitrarily and intentionally stopped by NAOC due to the existing issues. Supervised tenders as contracts emanating from these tenders are still paid for by NPDC. Progress the OB/OB GMS contract that is at Commercial Stage but was blocked by NAOC just to allow NAOC to conduct a guided-internal-tender that is used to arrive at a pre-determined winner.
”Resolve all the contractual issues arising from this matter with other Oil and Gas companies including SPDC, TOTAL, SNEPCO & ExxonMobil.
We are therefore calling on you sir, to use your powers under Sections 88(1) and (2) of the Constitution of the Federal Republic of Nigeria 1999 (As Amended), to promptly commence an investigation into this criminal racket and bring the perpetrators to book.”
The petition was, thereafter, referred to the House Committee on Public Petitions by the Speaker, Rt. Hon. Tajudeen Abbas, who presided over the plenary session.