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Ministry officials to refund N718m for improperly awarded contracts

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A Senate panel has revealed how the Ministry of Petroleum Resources paid N718 million through its tenders board to 11 corporate organisations for different services rendered without documents.

The discovery was as a result of the 2015 Auditor General Report submitted to the Senate Committee on Public Account chaired by Senator Matthew Urhoghide.

The Senate panel has recommended a refund of N718.9 million to the Federation Account by the government officials involved in the award of the contracts.

The panel’s findings showed that the contract was awarded in 2014 when the former Head of Service, Danladi Kifasi, was the Permanent Secretary of Ministry of Petroleum Resources.

Companies listed to have benefited from the consultancies are Amho Nigeria Ltd (Contract for consultancy service on critical stakeholders workshop on Liquefied Petroleum Gas (LPG) Policy Initiative at cost of N97.9million, Mimo Industrial Ltd (Contract for Consultancy Service on Project management for Liquefied Petroleum Gas (LPG) Policy Framework Development) at cost of N99.4 million, Peds Global Ventures (Contract for consultancy service on surveillance and monitoring of environmental restoration) at cost of N79.4 million, Crown-Tech Services Ltd ( Contract for consultancy service on capacity building for engineers to acquire tools surveillance and monitoring of environmental restoration) at cost of N82.2 million, DayLight Engeering Nigeria Ltd, (Contract for consultancy service on survey of oil and gas production and utilization in Nigeria) at cost of N48.1 million and Redbrick Consultants Ltd (Course fees oil and gas) at contract sum of N26.6 million.

It also revealed that about five consultancy contracts were awarded on July 14, 2014 while project on training was given out on October 17, 2014 and the payment was made in the 2015 budget.

The Auditor General of the Federation, in its report, stated that no further documents regarding payments were produced despite repeated request, adding the ministry failed to produce documents explaining and supporting the genuineness of the payments.

The query read, “An expenditure entry to N718.9 million was made in the cashbook as payment to 11 corporate bodies for different services rendered.

“Surprisingly, no further documents regarding this payment were produced for audit review despite repeated request, contrary to Financial Regulation 110 which states that ‘Auditor-General or his representative shall at all reasonable times have free access to books of accounts files, safes, security documents and other records and information relating to the account of all federal ministries /extra-ministerial offices and other arms of government or units.’

“Expenditure of this magnitude without documents explaining and supporting the genuineness of these payments cannot be accepted as legitimate charges against public funds.

“The permanent secretary has been requested to produce all documents recover and pay to treasury the sum of N718.9 million being expenditure un-accounted for and furnish recovery particulars for verification. “

The Ministry of Petroleum in its written submission presented by the Permanent Secretary, Bitrus Bako Nabasu, however said, “Relevant documents were attached to facilitate raising of payment vouchers and the total amount paid to contractors was N494.1 million.”

But the Chairman of the committee, Senator Urhoghide, and representative of Auditor General of the Federation, Eyitayo Agesin, said that documents attached to the vouchers were not enough to justify payment expenditure of that magnitude.

Meanwhile, the Senate Panel on Public Account has sustained a query of mismanagement of about N20 million against the Federal Ministry of Finance.

The lawmakers decided to sustain the query after the ministry ignored series of invitations extended to it by the Auditor General of the Federation with no response.

The chairman of the committee wondered how the ministry could be avoiding invitations to give account on the money spent, adding that the committee had sent invitations to the ministry on the issue with no response.

He said the committee had no other option than to sustain the Auditor General query against the ministry.

The query read, “A contract worth N2,477,900.00 was awarded by the ministry. It was observed that the contractor submitted a quotation before the invitation to bid for the contract was approved. This is contrary to the contract process when a bidding invitation is first sent to the contractor before the quotation. Also, the contractor’s tax clearance certificate was not provided by the contractor.

“The permanent secretary has been requested to explain these lapses.

“A sum of N2,768,760.54 which is equivalent of $13,919.00 was overpaid as estacode allowances to some staff of the ministry on foreign tours. This overpayment was done as a result of transit days which were included in their estacode allowances.

“However, this is contrary to Sections 130106 – 130108 of the Public Service Rules which stipulates that such allowances are granted to enable staff pay for lodging and feeding expenses during official hours duly approved by the approving authority.

“The permanent secretary has been requested to compel all the staff involved in the irregularity to refund the excess estacode allowances to the sub-treasury and forward the receipt to my office for confirmation.

“A total amount of N16,858,800.00 cash advances granted to some staff of the ministry between October and December, 2015 were not retired, contrary to Financial Regulation 420.

“The permanent secretary has been asked to compel the affected staff to retire the cash advances without further delay or deduct the amounts from the involved staff’s salary en-bloc and furnish my office with the retirement or deduction particulars for verification.”

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Bloody clashes: Sanwo-Olu’s RTEAN ban timely, say auto journalists

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The Nigeria Auto Journalists Association (NAJA), the umbrella association of automotive reporters in Nigeria, has commended the Lagos State Governor, Babajide Sanwo-Olu, for his swift action in suspending all activities of the Road Transport Employers Association of Nigeria (RTEAN) in the state following the recent restiveness between rival members of the group in Iyana-Iba, Ojo and Lagos Island areas of the state.

Mike Ochonma, Chairman of NAJA, made the commendation in a press statement he issued after the ban on the activities of RTEAN.

The chairman of NAJA stated that the ban by his the governor became imperative to prevent further breakdown of law and order in the state.

He called for more restraint and caution from RTEAN members to allow the state government to take necessary steps that would not only restore peace and decorum from the association, but more importantly, guarantee the security of lives of defenseless Lagos commuters going about their normal business.

The governor had also announced the constitution of a 35-man caretaker committee to take over activities of the union henceforth.

Heading the committee is Sulaiman Adeshina Raji with Bamgbose Oluseyi as deputy chairman.

During the clash last Wednesday, the transport union members were seen in a trending video clip engaging themselves in a free-for-all, hauling stones, bottles, cutlasses and other dangerous weapons at each other.

Two persons were reported killed during the clash.

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Major marketers hail NNPCL’s acquisition of top downstream firm, OVH Energy

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Group Chief Executive Officer (GCEO) of NNPCL, Mallam Mele Kyari

The Major Oil Marketers Association of Nigeria (MOMAN), an umbrella body of the largest downstream oil and gas companies in the country, has congratulated the Nigerian National Petroleum Company Limited (NNPCL) on the successful acquisition of OVH Energy Marketing (OVHEM) Limited, a major downstream operator.

MOMAN in a statement issued yesterday by its Chairman and Managing Director of Ardova Plc, Mr. Olumide Adeosun, welcomed and encouraged the ongoing market consolidation geared towards bringing stability, cost and logistics optimisation in the downstream sector.
OVH is the owner and operator of the Oando- branded retail service stations across the country, and the company and NNPCL are member companies of MOMAN.

The Group Chief Executive Officer (GCEO) of NNPCL, Mallam Mele Kyari and the Chief Executive Executive Officer of OVH Energy Marketing Limited, Mr. Huub Stokman, had announced the acquisition transaction last weekend at an event held in Abuja.

However, commenting on the development, Adeosun said, “We send hearty congratulations to NNPC Retail Limited and OVH Energy Marketing Limited on the successful acquisition of OVH Energy Marketing Limited by NNPC Limited.

“Both companies are active MOMAN members who are committed to our core values of health, safety, the protection of the environment, quality, customer service, innovation, technology and compliance with international corporate governance codes.

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“MOMAN welcomes and encourages the ongoing market consolidation which will bring stability, cost and logistics optimisation, enhanced competition and best practice sharing as we progress to a deregulated market.”

Kyari had said OVH Energy’s Oando- branded retail service stations would be rebranded into the NNPCL’s brand and merged with NNPC Retail Limited with full integration scheduled to take place by the end of 2023.
Both Kyari and Stokman were, however, silent on the financial implication of the deal and what would be the fate of OVH Energy Marketing’s employees when the formal takeover takes place by 2023.

The acquisition tagged by NNPCL as ‘Acquisition for Growth’, was expected to see the national oil company become the owner of entire assets of OVH Energy Marketing, licensee of the Oando retail brand and ASPM Limited, custodians of the Lagos Midstream Jetty, also known as West Africa’s first privately owned midstream jetty.

OVH Energy boasts of distributing over one billion litres of refined petroleum products annually while ASPM Limited is focused on strengthening Nigeria’s downstream value chain through the Lagos jetty.

In the short term, the acquisition would see the NNPCL receive a jetty (ASPM) with 240,000 metric tonnes monthly capacity, eight Liquefied Petroleum Gas (LPG) plants, three lubes blending plants, three aviation depots and 12 warehouses.

The deal would also bring over 380 additional filling stations under NNPCL retail brand in Nigeria and Togo, on its journey to attaining 1,500 stations, making it the largest petroleum product retail network in Africa.
OVH’s expertise spans the provision of jetty services and the marketing and distribution of refined petroleum products for retail, commercial and industrial purposes.

The NNPCL GCEO had explained that the strategic move was aimed to create the leading downstream energy company in Nigeria and West Africa, driven by operational efficiency, best-in-class management, and physical infrastructure while offering premium petroleum products and related services to customers, in line with global standards.

Through this acquisition, he said the NNPC Retail Limited would build on the existing success of OVH Energy and operate model service outlets leveraging OVH’s extensive asset base and commercial capabilities.

Kyari further stated that the NNPCL was bringing to the table, its 45 years of experience and strong capability to bear on the management of the facilities.He maintained that securing the country against energy poverty would mean access to petroleum products in addition to managing the energy transition, which he said has become a reality.

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NMDPRA seals 16 gas plants, arrests five suspects in Edo

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The Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) has sealed 16 illegal gas facilities in Edo State.

Some filling stations were also sealed over an alleged breach of rules and regulations.
The agency arrested five suspects during the exercise.
The agency’s state comptroller, Ebi Ogionwo, said the clampdown was to curb the activities of illegal and unlicensed oil and gas operators in the state.
He alleged that some misguided operators were setting up oil and gas facilities in areas not suitable for the business and without necessary approval from the agency.
Ogionwo said, “It is an offence for anyone to site such facilities without due approval from the NMDPRA. The agency is out to bring sanity to the operations of midstream and downstream petroleum business in the state.”

He further warned investors against taking laws into their hands by setting up gas and petroleum facilities in areas not approved by the agency.

Ogionwo said five suspects arrested during the exercise would be charged to court.

“There are laws, guidelines and regulations that people must follow before setting up oil and gas facilities. So, the purpose of the operations is also to check the level of compliance by those who have set up these facilities in the state and take necessary actions that are required,” he said.

Ogionwo added that the illegal operations of oil and gas facilities compromised the safety of lives, property, environment as well as deprived both the state and Federal Governments of the revenue that should accrue to them through taxes and other sources.

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