Monday, December 18, 2006

More Fallout Over Starcrest/Addax Deal Touches Chukwueke

Tony Chukwueke, the former Chrome executive and close associate of ERHC Energy chairman Sir Emeka Offor, may be at the center of a new firestorm following his ouster as the head of the Petroleum Ministry last week. A report in an industry intelligence journal, Petroleum Africa, says Chukwueke is being seconded to the Dept. of Petroleum Resources, a former berth, to find out why billions of past-due payments due for non-JDZ blocks awarded in 2005 and 2006 have apparently not been made.

At another angle, however, the story appears to be yet another effort by majors working through Petroleum Africa to indict Offor, a Nigerian billionaire who has been decidedly unpopular with ExxonMobil, Chevron and Anadarko ever since he won a substantial cluster of rights concessions in the JDZ in open bidding last winter and then walked away with choice rights in OPL 291, outside the zone (see my December 1, 2006 post).

In fact, since the story is unsourced - as was the Barry Morgan story in UpstreamOnline that hinted at the same scandal - it is likely that someone from the majors' back office is peddling the story to a variety of publications. There is no indication that doing so has made the least bit of difference, however.

Here's the latest unsourced hit piece:

Nigeria’s DPR in $2.7 Billion Oil Scandal
© Petroleum Africa. All rights reserved.

Petroleum Africa has learned through inside sources that a scandal is about to break in Nigeria’s petroleum industry in regard to $2.7 billion in oil revenue that has yet to be collected from the 2005/2006 bid rounds.

Apparently a special meeting of high level government officials was called last Friday that included President Olusegun Obasanjo, Petroleum Resources Minister Dr. Edmond Daukoru, and Tony Chukwueke, the former head of the Department of Petroleum Resources (DPR). At the meeting Obasanjo was informed that many of the 2005/2006 bid round winners had not yet made payments for their respective blocks; 25 oil blocks were awarded in the 2005 round and 13 in the 2006 mini bid round.

The shocked president directed high-level officials at the meeting to set up a committee to look into the extent of default, and other problems associated with the bid rounds.

An excited Obasanjo gave both Daukoru and Chukwueke a firm directive to recover the money. “Where is my money, where is my money? You have to pay this money. It was in the budget and people are watching,” a panicked Obasanjo reportedly said.

Last month Chukwueke was re-assigned to the Petroleum Ministry over what was commonly believed to be related to the Starcrest/Addax deal for OPL 291. Earlier speculation had it that Chukwueke was to be reinstated, but at this time it does not appear a full re-instatement to DPR is likely for Chukwueke, but rather a return to the DPR to get the accounts in order, so to speak. He will be working with the Acting Director of DPR, Mrs. Chioma Njoku, while he carries out the President’s directive.

Our source postulated: “Industry watchers are beginning to wonder if Chukwueke’s removal last month from the DPR was solely as a result of the controversial Addax/ Starcrest $35m deal on OPL 291, or it is a case of a Pandora’s Box about to be blown open?”

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