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The House of Representatives Committee on Petroleum Resources (Upstream) on Tuesday commenced investigation into the cancellation of metrology contract which led to the loss of $10 billion revenue yearly.
Victor Nwokolo, chairman, House Committee on Petroleum (Upstream) who spoke at the investigative public hearing held in Abuja, frowned at the “non implementation of the Federal Government policy on legal metrology services in the upstream sector.’
He explained that the investigative public hearing was aimed at halting continued revenue leakages in the sector.
“This public hearing is an avenue to gather the expert opinions of critical stakeholders and the general public to guide the House to take effective decision on the matter,” Nwokolo said.
“We are determined to put a stop to leakages in the system. These leakages distort the revenue profile of the nation and promote corruption,” he added.
Nwokolo also reiterated the resolve of the House towards putting in place all deliberate measures to ensure the economic growth and citizens’ well being.
While declaring the public hearing open, Speaker Yakubu Dogara represented by Chukwuma Onyema, Deputy Minority Leader, observed that the signing of MOUs by the Nigerian government with Independent Service Providers (ISPs) was aimed at the verification and certification of measurements and equipment used for the export of crude oil from Nigeria in accordance with international standard of legal metrology.
Dogara said the partnership had saved Nigeria a great deal of revenue to the tune of $10 billion dollars annually; however, he regretted that the stoppage of the inspectors since 2016 has once again encouraged corruption in the sector.
“This partnership has saved Nigeria a great deal of revenue to the tune of $10 billion per annum. Regrettably, the inspectors have been stopped from operation since 2016, thereby encouraging corruption,” he said.
He added that the hearing is pursuant to the constitutional duties of the legislators in Sections 58 and 59 of the 1999 Constitution as amended, and that the House is committed to unravelling all corrupt practices and illegal actions inimical to economic development of the nation.
He noted that this is pertinent since crude oil has been and remains the major source of Nigeria’s energy, revenue and foreign exchange earner for the past four decades.
“For the past four decades, crude oil has been and still remains the major source of energy, revenue and foreign exchange for the Nigerian economy,” Dogara noted.
The public hearing had in attendance key stakeholders from the Ministry of Industry, Trade and Investment, Nigerian National Petroleum Corporation (NNPC), Directorate of Petroleum Resources (DPR), Independent Oil Companies IOCs), Independent Service Providers (ISPs), etc.
Legal metrology services imply a process of standardization, verification and measurement of quantities of crude oil exported from the country by the Independent Oil Companies (IOCs).
Relying on a motion tabled before the House of Reps on December 5, 2017, the lawmakers are contending that the amount of crude oil being shipped out of the country are not properly measured and verified in line with international best practices, thereby shortchanging the country of billions of dollars in revenue.
A representative of the Ministry of Industry, Trade and Investment, Edet Akpan, said the need for the legal metrology services in the oil sector was to ensure that standards are in line with international best practices.
“The idea of legal metrology is to ensure that standards are in line with international best practices,” Akpan said.
Asked why the Ministry abrogated the contracts for the process that saves the nation such huge revenue, Akpan said the Ministry had to cancel the contract with Independent Service Providers (ISPs) because of the problem of funding.
A representative of the ISPs had earlier told the Committee that officials of the Ministry had in 2016 stopped them from going ahead with the process of implementing the legal metrology services even as they had a subsisting legal contract to that effect.
He added that within the short period they worked, the ISPs were able to uncover many sharp practices among the Independent Oil Companies (IOCs), which he said, they brought to the attention of officials of the Ministry.
“We discovered many sharp practices among the IOCs and we brought it to the attention of the Ministry but nothing was done,” the witness told the committee.
In her remarks, Rita Orji (PDP-Lagos) who frowned at the failure of officials of Federal Ministry of Trade and Investments for a breach of contract with the ISPs, outlined the legal implications of the Ministry’s actions.
“There are three conditions under which a contract can be abrogated. And with the information available before us here, there is nothing to suggest that the ISPs had deviated from the terms of this contract. So, why were they disengaged?”Orji queried.
While ruking, the Committee resolved to continue the investigative public hearing next week so as to arrive at a comprehensive conclusion.
KEHINDE AKINTOLA, Abuja
