The senate has mandated its committee on petroleum resources (upstream) to investigate the alleged irregularities by Ibe Kachikwu, minister of state for petroleum resources, in the renewal of oil and gas leases to companies who do not pay royalties.
The resolution of the senate came after a motion sponsored by Omotayo Alasoadura, senator of representing Ondo central, and three other senators.
Alasoadura said the actions of the minister are costing the government about $10 billion in revenue and failure to pay royalties is a ground for revocation of leases.
“The honourable minister of state for petroleum resources is granting all manner of illegal discounts and rebates in the process of the ongoing renewal of the leases,” he said.
“The action of the honourable minister of state for petroleum resources is capable of shortchanging the country and denying the federation the appropriate revenue accruable from the renewal of the said leases.
“The honourable minister of state for petroleum resources and Department of Petroleum Resources is proceeding to renew leases of companies that have brazenly and illegally refused to pay royalties due to the government from oil and gas lifted by the said companies in contravention of extant laws.
“Under the provision of extant laws, failure to pay royalties is a ground for revocation of leases and a legal barrier to the renewal of applicable leases.
“The irregularities being perpetrated by the honourable minister of state for petroleum resources and the Department of Petroleum Resources in the ongoing lease renewal process is capable of denying government revenue in excess of $10 billion as a result of illegal discounts and rebates in the process of lease renewal.”
On his part, Shehu Sani, the senator representing Kaduna central, said the motion is a narration of what was going on in the oil and gas sector.
“The minister of state has engaged in actions that have contravened the laws but he wrote a letter about transparency,” Sani said.
“We should invite the minister to make some clarifications. We must do everything possible to open up the oil industry. We should summon the minister of state and put him in the dock.”
The motion was adopted after it was put to a voice vote by Ike Ekweremadu, deputy senate president.