Wednesday, during plenary, the Senate made an Ad Hoc Committee to look into Shell Petroleum Development Company (SPDC) for not following the Petroleum Act and breaking the Joint Venture Agreement with the Federal Government.
The Senate tells Shell to give $200 million back to FG because it allegedly broke a JV agreement.
Under the SPDC and NNPC Joint Venture agreement, the Ad Hoc committee was asked to look into the Oil Mining Lease that was given to SPDC from 1959 to 1989 and from 1989 to 2019.
The Senate President, Ahmad Lawan, put together the committee, and Sen. Sabi Abdullahi (APC-Niger) is in charge of it.
Senators George Thompson Sekibo (PDP-Rivers), Abdullahi Yahaya (PDP-Kebbi), Bassey Albert Akpan (PDP-Akwa Ibom), Solomon Adeola (APC-Lagos), Smart Adeyemi (APC-Kogi), and Aishatu Ahmed are also members (APC-Adamawa).
Senate asked for a refund of $200 million, or any amount less than what SPDC paid to the Federal Government, including fines and interest on the lease agreements.
The decision was made after they looked at a motion from Sen. George Sekibo (PDP- Rivers ).
The name of the motion:
“Shell Petroleum Development Company of Nigeria Limited did not pay the $200 million that was due from the Oil Mining Lease (OML) under the SPDC/NNPC Joint Venture Agreement.
“And, illegal and unlawful renewal of Oil Mining Leases by the Ministry of Petroleum Resources/Department of Petroleum Resources (DPR) contrary to paragraph 10 of the First Schedule to the Petroleum Act 1969 (now Section 86(1) and 86(6) of the Petroleum Industry Act 2022).”
In his lead debate, Sekibo said that the Joint Venture (JV) agreement broke the Petroleum Act of 1969. From 1959 to 1989, the now-defunct Department of Petroleum Resources (DPR) and the Ministry of Petroleum Resources gave a 30-year Oil Mining Lease to the SPDC and NNPC.
He said that by doing this, the Oil Mining Lease had been illegally extended by 10 years instead of the 20 years that was allowed by law. This was done without following the rules in the Petroleum Act of 1969, paragraph 10 of the First Schedule.
He said that when the first oil mining lease ran out in 1989, the Ministry of Petroleum and DPR gave SPDC and NNPC JV another 30-year lease instead of the 20-year lease required by the Petroleum Act. This new lease went from July 1, 1989, to June 30, 2019.
He said that this goes against paragraph 10 of the First Schedule of the act in question.
He said that the Ministry of Petroleum Resources and the DPR illegally gave the SPDC and NNPC JV an extra 10 years of oil mining lease from 1969 to 1989. During that time, the Federal Government lost 120 million dollars in fees, taxes, rents, and royalties.
He said that the Federal Government lost another 80 million dollars during the second extra 10 years, bringing the total loss to 200 million dollars.
He said that the loss of $200 million, which is the same as N83.130 billion, could have helped the economy of the country a lot.
He was worried that the trend of illegally extending Joint Venture (JV) lease periods from 20 years to 30 years without using the Petroleum Act may have also happened with other Joint Venture agreements with International Oil Companies (IOCs) and needs to be looked into.
He said that a whistleblower had asked the EFCC to get the money back from SPDC for the illegal extensions made by the Ministry of Petroleum Resources, DPR, and to look into all other Joint Venture agreements with the same IOCs.
He pointed out that the Constitution gives the National Assembly the power to make laws for the Federation. This power also includes the power to make laws to promote national prosperity and a strong, self-sufficient economy, as stated in section 16(1)(a) of the 1999 Constitution of the Federal Republic of Nigeria as amended.
As Section 88 of the Constitution says, he said, the Constitution also gives the National Assembly the power to look into any wrongdoing when it comes to how the laws it makes are used.