Lease renewal for oil majors not in Nigeria

Last week’s renewal of three prolific oil mining leases (OMLs) for ExxonMobil by the Federal Government has attracted the criticism of concerned Nigerians who describe the exercise as a negation of the country’s overall interest, even as more multinational oil companies are in the frame for more renewals in the next one month.

Mobil Producing Nigeria Unlimited (MPNU), operator of the joint venture with the Nigerian National Petroleum Corporation (NNPC), signed agreements with the Federal Government last Friday to revalidate its rights in OMLs 67, 68 and 70, following their expiration last year after 20 years.

The three leases are only a few out of about 16 oil concessions operated by various multinational oil companies, including ExxonMobil, Shell and Chevron, whose negotiations for renewal have been pending for the last two years.

It was gathered that President Goodluck Jonathan had directed that further negotiations be suspended on the leases until the Petroleum Industry Bill (PIB) currently languishing before the National Assembly has been passed into law, as the terms of negotiations were still based on the outdated provisions of the Petroleum Act of 1969, which were deliberately skewed against the country’s interests.

But, reacting to the renewal, which gives ExxonMobil right to continue operating the lease for another 20 years under terms considered not in sync with modern economic reality, the Africa Network for Environment and Economic Justice (ANEEJ) condemned the secrecy associated with the negotiations and renewal processes, particularly at a time when the industry is facing enormous uncertainty and corruption.

“It is not in the best interest of Nigerians, especially as the Joint Venture agreement terms are shrouded in secrecy,” ANEEJ Executive Director, David Ugolor, said.

“It is most unfortunate that the Petroleum Minister, Diezani Alison-Madueke, had to go ahead with the exercise despite that President Goodluck Jonathan had in February, 2011, halted the renewal of leases for International Oil Companies (IOCs) operating in Nigeria, pending the passage of the Petroleum Industry Bill. What reforms have been put in place to warrant these leases being renewed for 20 years?”

Mr. Ugolor wondered why the agreements signed between the Petroleum Minister and ExxonMobil are not made public for stakeholders, including civil society groups, to review before their final endorsement, pointing out that “the secrecy that has shrouded operations of the oil and gas sector over the years is been sustained indirectly by government, amidst promises of reform and transformation.”

He said the government appears to be contradicting itself when the President admitted in his January 15 nationwide broadcast the challenges of corruption in the oil and gas sector, and its pledge to review the legal and regulatory regimes to address transparency and accountability issues in the Industry, while maintaining secrecy in its dealings with operating companies.

“Why is the Petroleum Minister in a haste to seal the Joint Venture agreements, when she recently constituted various committees and task forces, including the PIB Special task force and the sub-technical committee as well as the special task force on NNPC and the petroleum revenue, to accelerate reforms in the oil and gas industry?

“If the government had the interest of all Nigerians at heart, it would rather have expedited action on the passage of the PIB as soon as possible before going into the renewal of those agreements with the oil majors,” Mr. Ugolor said.