Renewal of oil lifting licences, auction of oil blocks, NNPC contracts at stakeBeyond talks of maintaining the countiry's geo-political power balance, it has emerged that the strugglefor the nation's enormous oil wealth is at the heart of the refusal of the cabal that has taken over control of government in President Umaru Yar'Adua's absence to pave way for Vice President Goodluck Jonathan to become acting president. In Nigeria the capture of political power gives the beneficiary access to oil wealth, which is then deployed to oil political machinery and dispense patronage.
Key decisions concerning oil are vested on the president and since he assumed office on May 29, 2007, those close to Yar'Adua, especially members of the kitchen cabinet, have ensured that the distribution of oil largesse favours to their cronies.According to industry sources, there are key decisions to be taken in the oil industry, which would affect the fortunes of the cabal and hawks in the presidency. If Jonathan becomes acting president, the hawks believe the vice president will sideline them given that since the administration came to power in 2007, many of them have done everything to undermine his office.One major decision is the renewal of licences for oil lifting as the current licences have elapsed. This is the prerogative of the president and if Jonathan is made acting president, it will be his responsibility to sign the renewal of these licences.
Transactions involving oil are denominated in dollars and oil lifting licence renewal involves millions of dollars.Closely related to this is licence extension for oil companies. These licenses have also elapsed and need presidential approval for extension.Also, the auctioning of marginal oilfields to indigenous oil companies is one major way of extending presidential patronage. The struggle for marginal fields is always intense among indigenous oil companies and closeness to the president or closeness to the cabal is imperative for getting a marginal field during auctioning despite the façade of open bidding that may be put up in the newspapers.The other aspect which is not well known to many people, according to BusinessDay investigations, is the award of contracts by the Nigerian National Petroleum Corporation (NNPC) and its subsidiaries like NAPIMS. According to BuinessDay investigations, the only requirement to get such contracts is presidential privilege. "That is the biggest cash cow involving millions of dollars. It is normally not very challenging in terms of technical input. Whoever gets the contract only needs to invite those with the technical expertise and share the proceeds with them. Any supply in NNPC is denominated in dollars.
You can see why these people are uncomfortable with the idea of power changing hands midway through the president's term", the source told BusinessDay.. Since coming to power, Yar'Adua has changed the landscape of the nation's oil industry. Hitherto, Nigeria's oil industry was dominated by European and American companies but in the last two years, Russian and Chinese oil giants have become deeply involved in the oil industry with very lucrative oil wells and contracts allocated to them.
Read more: Control of oil behind hardliners' refusal to accept Jonathan (http://www.businessdayonline.com/index.php?option=com_content&view=article&id=7899:control-of-oil-behind-hardliners-refusal-to-accept-jonathan&catid=85:national&Itemid=340)