* Activists say contracts given to firms with no experience
* Say transparent bidding process lacking
* State oil firm denies any wrongdoing
By Tim Cocks
LAGOS, May 3 Nigerian lawmakers said that next
week they will investigate deals in which the state-oil firm
gave two local firms with no previous operating experience the
rights to make potentially billions of dollars from oilfields
without competitive bidding.
Local activists raised the issue with the parliament last
week, while Nigerian National Petroleum Corporation (NNPC) has
denied any wrongdoing.
"We have invited them (the activists) to come and table the
matter and substantiate their claims ... We have also invited
NNPC to get their side," Senator Emmanuel Paulker, the head of
the Senate committee on upstream oil and gas, told Reuters.
The lower house passed a motion late on Thursday to
investigate the deals, which activists say cast doubt on pledges
by President Goodluck Jonathan's government to improve
transparency and end an era of backroom deals that have
characterised Africa's biggest energy industry for decades.
Activists say multi-layered deals on oil blocks through
secretive local companies, often lacking technical expertise,
are at best inefficient and at worst an avenue for corruption.
In 2011, Septa Energy and newly formed Atlantic Energy,
owned by tycoon Jide Omokore, signed "strategic partnership
agreements" with the Nigerian Petroleum Development Company
(NPDC) to help it operate oil mining leases (OMLs) 4, 38, 41,
and 30, 34, respectively.
Reuters obtained copies of the deals on Friday.
The chief executive of Atlantic Energy Scott Aitken was
previously the head of Seven Energy, which owns Septa. Neither
company was immediately available for comment.
"NO NEED FOR BIDDING PROCESS"
Activists from a region of the Niger Delta, where the blocks
run by Atlantic Energy are located, allege the deals breach
rules requiring the government to openly tender for stakes in
oil blocks. They also accuse Oil Minister Diezani Alison-Madueke
of having an indirect financial interest in Atlantic, which was
denied by the state oil firm that she heads.
"The protesters complained of the secret and arbitrary
farm-out of (the blocks) ... to both Atlantic Energy Drilling
Concept and Septa Energy Limited without regard to the law and
due process," Afam Ogene, the proposer of the motion, told
parliament late on Thursday.
The NNPC, the NPDC's umbrella company, said in an emailed
statement there was legally no requirement to tender the deals.
"There was never any sale of equity involved ... As such,
there is no need for a bidding process," it said.
"There is no evidence indicating that the honourable
minister of petroleum resources has any direct or indirect
pecuniary interest in the company (Atlantic)," it added.
Former operator Royal Dutch Shell sold its 45
percent stake in the blocks to various bidders, including
Heritage Oil and a consortium involving Eland Oil
in 2011. At the same time NNPC transferred its 55
percent stake to its production arm NPDC.
NPDC then planned to operate the blocks itself but industry
experts say it lacked the capacity or finances to do so.
The agreements struck with Atlantic and Septa were supposed
to resolve this, but the companies quickly sub-contracted out
the work to other oil operators with relevant experience.
"It is worrisome that the entire racket became possible
through a mischievous process of hinging the transaction on the
strategic alliance agreement, an action deliberately designed to
circumvent due process and transparency," Ogene said.
Copies of the original agreements obtained by Reuters show
Atlantic gets 30 percent of oil profits from OML 34 and 30,
while SEPTA gets 10 percent of oil profits on OMLs 4, 38 and 41.