By Daniel Idonor
THE Presidency may have turned down request by some oil companies calling for a probe of the Federal Government’s approval of the $600 million renewal fee in respect of oil mining leases, OMLs, for Mobil Producing Nigeria, MPN, as approved by then President Umaru Yar’Adua.

The Presidency maintained that the approval was done in good faith by the late Yar’Adua based on the need to sustain and grow investments in the oil and gas sector as well as consolidate on the peaceful investment climate in the hitherto troubled Niger Delta region informed.

The government had early last year constituted a presidential technical panel headed by the Special Adviser to the President on Petroleum, Mr. Emmanuel Egbogah, to recommend the best pricing for the renewal of all the three OMLs 61, 68 and 70 operated by MPN in the country, which recommended $1.8 billion.

But Vanguard learnt that the Ministry of Petroleum Resources had in a memo to Yar’Adua, listed the implications of attempting to push upward to the $1.800 billion maximum renewal fee proposed by the Egbogah panel; and only recently there were reports that the leases were under-priced and, therefore, needed to be revised upward.

According to the Presidency, the money offered by the oil firm was about the highest any investor was willing to pay for the lease renewal, especially given that there was no specification on how much should be paid to renew OMLs lease; insisting that Yar’Adua’s decision on the matter remains final.

A top Presidency aide told Vanguard that controversy surrounding the oil deal was unnecessary, sressing that those who are canvassing the cancellation of the deal are doing great injustice to the late President and do not have the interests of the country at heart.

The source who pleaded anonymity said the petroleum act of 1969 does not in any way specify how much the oil companies would pay for renewal of their leases adding that prior to the $600 million deal, the oil majors were only paying just $1 million as the renewal application fee.

“Some people are just bent on discrediting other people because of selfish interests. As far as the government is concerned, that agreement is binding and any attempt by any individual or group to upturn it would be a slap in the face of the late president.

“He was an upright man and unless they are saying that the man connived with certain persons to sell the country. This will not only be preposterous but outrageous,” the source stated further.

Speaking further on the argument that the document was signed by the minister of state instead of the main minister and therefore makes the deal invalid, the source said such an argument was not tenable since both ministers are equal before the Constitution of the Federal republic of Nigeria.

“The Constitution does not say one minister is junior to the other. A minister is a minister irrespective of the portfolio they hold. It is at the discretion of the president to say who goes where and the fact that one is a minister and the other a minister of state does not make one inferior or junior to the other. They are both equal before the Constitution,” the source said.

The source added that “in any event the late president specifically put all matters having to do with OMLs and all acreage matters under the authority of MHSPR and expressly authorised him to renew the leases on the terms proposed by him”.

In the memo the memo dated November 19th, 2009, which was made available to our correspondent by a top Presidency source, the then Minister  of State in the Petroleum Ministry, Mr Odien Ajumogobia was quoted as telling the late president in the memo the recommended price of $1.8 billion was no longer realistic, in view present day economic realities.

The Memo noted that after a protracted impasse between November 2008 and August, 2009, “sometime in August 2009, MPN offered a reserve fee of $75 million for oil mining leases (OMLs) 67, 68 and 70 as their best offer (neither the Petroleum Act nor precedent provide any real guidance as to what fee could be imposed).

The initially indicated reserve fee of $2.55 billion proposed by the honourable minister of petroleum resources to be imposed on MPN was rejected by the HMSPR who proceeded to negotiate a renewal fee based on recommendations contained in a report by a technical committee chaired by Emmanuel Egbogah”.

The memo revealed that after prolonged negotiations, MPN succumbed to a payment in the sum of $600 million as a renewal fee in addition to the previous conditions imposed by the government, which included relinquishing its OML 69 and commitment to constructing a 500-mega watts, independent power project (IPP) plant which requires an investment by MPN of approximately $900 million.

The minister in the memo consequently sought the counsel of the late President Yar’Adua to” direct him to close the negotiations on the basis of a renewal/reserve fee of $600 million in addition to other conditions viz relinquishing of OML 69 and commitment to build 500 MW IPP Plant with an agreed timetable which MPN has accepted in principle or to permit the dispute over an appropriate renewal/reserve fee to proceed to litigation, it is will, with its attendant outcomes”.

The late Yar’Adua thereafter expressly approved that the MPN OMLs be pegged at $600 million renewal/reserve bid with all the other conditionality and directed the HMSPR to execute the agreement with MPN.