SweetCrude Weekly Edition
Lawmakers overturn award of Dawes Island marginal field licence
Lagos — The House of Representatives Committee on Public Petitions has overturned the perceived shady award of Dawes Island marginal field to Petralon 54 Limited, Access Bank, Coronation Capital and Julius Berger by the Department of Petroleum Resources, DPR, under the directive of the Minister of State for Petroleum Resources.
In arriving at its decision, the Committee summarised the issue for determination as the basis on which the DPR punished two members of the JV (Eurafric and Tako) and yet rewarded one member (Petralon) for the purported joint failure of the JV.
The Committee ruled that since the DPR has admitted the joint venture relationship between Eurafric, Tako and Petralon, in the interest of peace and harmony, all three parties should benefit from any re-award of the licence. The licence should therefore be reinstated to its 5 prerevocation status in the interest of conscience, equity and national interest, the Committee ruled.
It questioned Petralon's 2018 petition against its JV partner Eurafric (which wasn’t served on Eurafric) and opined that it raised an almost irrefutable presumption of Petralon’s deliberate intent to cast aspersions and undermine Eurafric in a bid to take over the asset as it eventually did.
Following the inability of the Director of the DPR to establish an objective ground for awarding the licence to Petralon alone, the Committee opined that there was an ulterior motive in the Minister of State for Petroleum Resources and the Director of DPR awarding the licence to Petralon, adding that the decision was inequitable, nepotistic and a reason why the country was fraught with challenges.
In response to questions on the joint liability of Eurafric, Petralon and Tako by virtue of the Joint Venture Agreement for non-performance of the field, the DPR acknowledged the JV relationship but illogically apportioned blame on Eurafric alone because in its lame excuse, ‘it communicated with only Eurafric’. This prompted the committee to further question why the DPR should unfairly punish Eurafric and Tako, yet reward Petralon for the same offence; a situation which the committee highlighted as suspicious and subjective.
DPR claimed in a blatant falsehood that only Petralon applied for the field license despite evidence before the
committee that Eurafric made an application to the DPR on behalf of the JV prior to that of Petralon.
It was gathered that Eurafric also submitted copies of appeals it made on behalf of the JV to the President and the Minister of Petroleum Resources, as well as the Minister of State, Petroleum Resources.
While responding to questions from the lawmakers, the Minister of State for Petroleum Resources, who was represented by the Director of DPR, justified the revocation of the field licence on the grounds that nothing was done on the field from award of the licence till its revocation. In addition, he said no field development plan was submitted for Dawes Island.
The Director of DPR also claimed that he got approval from the Minister of State for Petroleum Resources to award the field licence to Petralon alone and that the decision was in the best interest of the nation.
However, upon questioning, the DPR Director was unable to justify why the licence was issued to Petralon alone; a company which he admitted was part of the JV and complicit in its nonperformance, warranting the revocation of the licence in the first place.
On how the JV members would recover their investments of over $50 million on the field prior to the license revocation, the Director explained that the expenses were borne on solerisk basis and thus a loss to the companies. He was however unable to explain or justify why Petralon was singled out of the JV to recover its investment, yet, Eurafric and Tako were left with their losses.
The DPR Director also had difficulty explaining how the award of the licence to Petralon alone, which was likely to encumber the field with time consuming litigation, was in the best interest of the nation.
The Director then claimed that the decision to award the licence to Petralon alone was based on a 2018 petition from Petralon against Eurafric.
When questioned further, it was established that neither the DPR nor the Ministry of Petroleum Resources notified Eurafric of the said petition or requested a defence from Eurafric before acting on the said petition.
This prompted the Committee to question the motive of the Ministr y of Petroleum Resources and the DPR and their interest in Petralon.