N3bn Scam: DPR And Harrowing Evidence Of Fraud By Ifeanyi Izeze

When the Department of Petroleum
Resources (DPR) at a meeting with
the Senate Committee on Gas
Resources in Abuja accused
International Oil Companies (IOCs)
of frustrating the efforts of the
Federal Government to monitor and
measure the amount of gas
produced at every given time, the
agency must have meant to ask
that it be scrapped effective
immediately for gross incompetence
in doing what it was set up for.
In 2009, DPR awarded a contract for
the installation of Real Time Gas
Monitoring meters at specified
production points. This involved the
design, procurement, installation
and commissioning of a system that
will facilitate the remote monitoring
of volumes of produced natural gas,
in real time, from facilities operated
by multinational oil and gas
companies in Nigeria. This contract
which was part of government’s
efforts to separate natural gas from
oil production to generate additional
revenue was meant to last for nine
months. But almost four years after,
only 8.3 percent of the contract has
been executed.
As revealed, the level of project
completion between 2009 and 2010
recorded only three percent, while
in the same project from 2010 to
2011 attracted 5.3percent
milestone, making a total of
8.3percent completion.
Out of 116 installation sites, only 10
have been installed with the
monitoring gadget. The reason as
given by the managers of Riverman
Technologies, the DPR contractor
was that, “The IOCs do not give us
permission to carry out evaluation in
their sites. Where evaluations are
done and engineering report sent to
them, they do not get back to us.
And that has been a major setback
for us.”
The major culprits in this regard as
alleged are Shell Petroleum
Development Company of Nigeria
Limited (SPDC); Chevron and
ExxonMobil. Out of the 116 sites,
Shell owns 70 locations. None of the
locations have been installed with
the equipment.
This is the harrowing gist of the
fraud: As gathered, the original
contract value was N1billion. In
2009, N812 million was
appropriated for the project; in
2010, N632 million; in 2011 N452
million; and in 2012, N700 million
was appropriated.
For four years running, budgetary
allocations had been made for the
same project. So how would you
expect the not-very-honest
administrators of DPR to put
pressure on the IOCs to allow the
contractor do his work when every
year they get almost the net worth
of the contract?
What has happened to our
conscience in this nation? This is
just one of the harrowing things
happening in government- control
of the nation’s oil and gas industry.
The very powerful regulator of the
oil and gas industry gave out a
contract that has a time-line of nine
months and in three years only 8.3
percent of the contract was
executed. Meanwhile, this regulator
has blown almost three hundred
and fifty percent of the original
contract value to achieve only 8.3
percent. You see the warped
mindset on parade by people in
authourity! And for how long can we
continue like this as a nation?
Shell in their response raised an
important issue of competence as
they alleged that Riverman
Technologies Ltd, the DPR
contractor “appeared not to have
the capability and capacity to
handle such contract, hence the
delay.” Why should DPR award such
sensitive contract to an incompetent
company? The answer is corruption
and fraud-inspired favouritism.
Even the DPR director at the Senate
presented the contractor as grossly
incapable of carrying out the
assignment.
Hear him: “The companies would
need to shut down operations to
allow the contractor to survey and
design the appropriate technology
to be used, but they were not
willing to do that.” So DPR expected
the IOCs to shut down their
operations so that its contractor can
work? Is it possible? No wonder Shell
alluded that the contractor lacks the
capability and capacity to handle
the project.
The entire management of the DPR
should be ashamed of their service
to this nation and honestly accept
their incompetence or rather
insincerity and lack of will -power to
be honest in the service for which
they are lavishly paid. If the IOCs
refused to obey the DPR’s order to
allow the contractor do this all
important job, who would they
obey?
It was an outright nonsense to
accuse the IOCs, particularly Shell of
using “some techniques to slow
down the installation of the real
time units that would give accurate
measurement of gas production and
utilization in the country.” These
IOCs are here to make “unholy”
profit from where they operate and
protecting your national interest to
them is of zero priority. And of
course this was one of the major
reasons government established the
DPR to police the operators and
ensure the right things were done
to serve and protect the interest of
the nation. Now the agency that
was supposed to be the strong arm
of government -control in the oil and
gas industry has turned a lame
duck just because of corruption.
This is pathetic indeed! The excuses
adduced by the DPR for the
abysmal performance in this vital
project could only be accepted in a
tombo(palmwine) bar.
Gas production in Nigeria has been
deliberately played down by the
IOCs to the detriment of revenue
derivable from it. How do you know
the quantity of gas being produced
and utilised without real time
monitoring? As rightly said by the
Chairman of Senate Committee on
Gas Resources, Nkechi Nworgu,
Nigeria should know how much gas
that is produced and utilised so that
if the oil companies have not been
paying accurately, we can
compelled them to do so.
For years there has not been a
standard measurement of the
volume of gas produced and utilised
in the country. DPR has so far
depended solely on what the IOCs
tell them to peg the volume of gas
produced and utilised in the
country. And if the DPR does not
know, it means Nigeria does not
know with exactness the quantity of
natural gas the IOCs are taking
away from the country. These
companies just give you any figure
they so wish. How long can we
continue like this as a nation?

IFEANYI IZEZE IS AN ABUJA-BASED
CONSULTANT ON STRATEGY AND
COMMUNICATION (iizeze@
yahoo.com; 234-8033043009)