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.

 ??  ?? The House of Representa­tives in session
The House of Representa­tives in session

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