Total and criminality cloud Nigeria exit for OMEL

Vol 15, PW 12 (15 Dec 11) People & Policy
     

Some blame ONGC Mittal Energy’s (OMEL) overdependence on French partner Total for its decision to relinquish two Nigerian deepwater exploration blocks.

Others blame fraud allegations against a Nigerian employee of the OVL joint venture with Mittal Investments. But OVL managing director DK Sarraf tells this report the decision to relinquish Nigerian block OPL-279 stems solely from its “low prospectivity.

” He confirms UK-based OMEL will submit a formal relinquishment application to Nigerian authorities by January 2012. “But we have yet to take a final call on OPL-285 (OMEL’s other Nigeria block),” he adds.

It’s never been smooth sailing for OMEL in the West African republic, where corruption is as pervasive as in India, if not worse. First it was let down by Total, its partner at both Nigerian blocks.

“OMEL authorised Total to carry out G&G (geological and geophysical) studies at OPL-279 as it had Nigerian deepwater expertise,” recalls an observer. “But Total carried out G&G studies in France in violation of Nigerian law.

” As a result, Nigerian authorities are refusing to let the consortium recover $9.87m in costs against future production. Worse, they are also refusing to allow an equivalent amount of ‘cost recovery’ at OPL-285.

This translates to an overall loss of $19.47m, of which OVL’s share is $10m. But that’s not all.

In June last year (2010), OMEL was forced to register a case of ‘fraud and forgery’ with the Lagos police commissioner against its own former finance manager Obinna Iheonu. Apparently, OMEL discovered a huge hole in its cash account during an audit carried out in October 2009.

After investigation, it found $129,830 (21m Nigerian ‘naira’) missing. This money allegedly disappeared straight into Iheonu’s pocket! “He also forged the signatures of an OVL officer when applying for a ‘personal loan’,” we hear.