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HomeBreaking NewsSenate probes Shell over joint venture breach, orders $200m refund to FG

Senate probes Shell over joint venture breach, orders $200m refund to FG

By Olugbenga Salami

Senate, on Wednesday, constituted an ad-hoc committee to investigate Shell Petroleum Development Company, SPDC over non-compliance with the Petroleum Act and breach of the Joint Venture Agreement entered into with the Federal Government.

The Ad-Hoc committee was mandated to probe the Oil Mining Lease granted to SPDC between 1959 to 1989, and 1989 to 2019 under the SPDC/NNPC Joint Venture agreement.

The ad-hoc committee which was constituted by the Senate President, Dr. Ahmad Lawan, has Senator Aliyu Sabi Abdullahi as its chairman.

Other members on the panel include Senators George Thompson Sekibo, Abdullahi Yahaya, Bassey Albert Akpan, Solomon Adeola, Smart Adeyemi and Aishatu Dahiru Ahmed.

Accordingly, the chamber demanded a refund of $200 million (USD) or any amount short of what was paid by SPDC, including penalties and interests under the said lease agreements to the coffers of the Federal Government.

The resolution was reached by the chamber after it considered a motion sponsored by Senator George Sekibo (PDP, Rivers East).

The motion was entitled, “Nonpayment of the sum of $200 million accruals from the Oil Mining Lease (OML), by Shell Petroleum Development Company of Nigeria Limited 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 the provision of paragraph 10 of the First Schedule to the Petroleum Act 1969 (now Section 86(1) and 86(6) of the Petroleum Industry Act 2022.”

Sekibo, in a presentation, observed that the SPDC/NNPC Joint Venture, JV agreement, in contravention of the provisions of the Petroleum Act 1969, by the defunct Department of Petroleum Resources (DPR) and the Ministry of Petroleum Resources, granted to the SPDC/NNPC a 30-year Oil Mining Lease from 1959 to 1989.

He observed that doing so constituted an illegal extension of the Oil Mining Lease by 10 years in the first instance, instead of the prescribed term of 20 years, without recourse to the provisions of the Petroleum Act 1969 in paragraph 10 of the First Schedule.

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