The House of Representatives on Thursday unveiled plans to recover over $30 billion in accrued fees and bonuses from mergers of some multinational oil companies which operate in the country.
The resolution was passed sequel to the adoption of a motion sponsored by Hon. Ademorin Kuye who expressed concern over the failure of the regulatory agencies to track the financial proceeds from the transactions.
In his lead debate, Hon. Kuye observed that the Oil Industry experienced several lateral mergers, buyovers, and takeovers of companies in the same oil and gas exploration, prospecting, production and marketing in the ‘90s.
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“The House also notes that Section 2 of the Petroleum Act, 2014 the extant law applicable under which the merger took place provides that the oil exploration licenses, oil prospecting licenses and oil mining licenses may be granted to only Nigerian citizens or companies incorporated in Nigeria, implying that mergers that result in a corporate body not indigenous to Nigeria, in terms of incorporation would exclude the new entity from the scope of Companies that can be given a license or lease under the Petroleum Act.
“The House is informed that the June 1984 merger of Gulf and Chevron which brought Chevron through the back door to inherit Gulf oil operations in the country, was not approved until July 1991, after careful consideration and bargaining that still shortchanged the country of over $65 million as at that time;
“The House is cognizant that other mergers between Exxon and Mobil to form ExxonMobil; Elf, Total and Fina to form TotalFinaElf, and between Chevron and Texaco to form ChevronTexaco, have resulted in new entities and companies that should have been subjected to processes such as: Application for assignment of interest in each block; Payment of reserve value in each block; Payment of a sign-on or signature bonus in respect of each block; Fresh registration at the Corporate Affairs Commission; and fresh commitment to social, community and environmental policies in Nigeria that were not done.
“The House is concerned that the mergers while increasing assets of foreign oil multinationals in the country, resulted in the layoff of hundreds of Nigerian professionals and brought some companies through the back door e.g Exxon and Fina were not physically present in Nigeria in their registered names and identities.
“The House is also concerned that the proper sign-on of the oil block inherited as assets was not done, thus costing the country hundreds of millions of dollars in signature bonuses and reserve value payments that should have been paid.
“The House is worried that the country bled revenue of over $30 billion in signature bonuses, reserve values and assignment fees of 43 oil blocks where merging companies operate,” he noted.
In their separate remarks, Majority Leader, Hon. Julius Ihonvbere and Chairman, House Committee on Rules and Business, Hon. Francis Waive both stated that since the joint Committees have not yet brought the work done on the NEITI report before the House, it cannot be in conflict with the motion.
The Speaker, Tajudeen Abbas agreed with this position and asked the joint committees to continue their work with the NEITI report which is broader than the single scope of this motion.
To this end, the motion was referred to the joint Committees on Finance, Public Assets, Justice, and Petroleum Resources (Upstream, Midstream and Downstream) respectively for further legislative action and report back within 8 weeks.
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