Indian Firm Ruins $6bn Refinery Project

House of Representatives ad hoc panel probing activities of the Nigerian National Petroleum Corporation (NNPC), its subsidiaries and the Department of Petroleum Resources (DPR), has accused an Indian firm ONG. C. Mittal of bungling a $6billion down stream project for the construction of an oil refinery with a production capacity of 180,000 barrels per day, generation of additional 2,000 mega watts of Independent Power Plant (IPP) and the construction of east west railway line.

NNPC legal deputy director, Ibrahim Bello said the letter of award which was signed by former president Olusegun Obasanjo was prepared by the NNPC, based on the allocation offer of the department of petroleum resources DPR.

He disclosed that although the company was not qualified, there was an order from above that the company be groomed on how to participate in the bids which it eventually won.

He said "We sought clarification from DPR on whether ONG. C. Mittal was officially awarded the three major projects, and if they have the capacity to execute the projects, and the response we got was that the company was supposed to execute any of the three projects."

Ibrahim disclosed that OPL 209 and OPL 212 were illegally acquired by the Indian company and the production capacity of the two oil blocs have increased over time, stressing that the company paid signature bonus for OPL 279 and OPL 285 respectively.

In a Memorandum of Understanding (MOU) signed between the operators and the ministry of petroleum resources, ONG. C. Mittal had promised to produce 650,000 barrels of oil for a start and raise its production capacity to 100,000 barrels within a specific period of commencement.

However Mr. Dulal Halder, who spoke on behalf of the Indian firm, told the committee that it is the intention of the company to invest in the down stream projects based on the MOU signed with the ministry of petroleum resources.

On the level of implementation, Ibrahim said the priority of government had been on the east-west railway project signed on May 14 2007, disclosing that the NNPC has indicated interest to partner ONG. C. Mittal in the refinery project.

Ibrahim said the company had green field refinery ground breaking session, saying the government of Nigeria had not given conditions to the company in the area of funding.

He said about $115 million was paid as signature bonus for the two oil blocs awarded to the company in the 2006 bid round, stressing that the company never bid for OPL 216 as alleged by the department of DPR.

Earlier, Hon Aguma had told the contractors to present their letters of award, as well as the evidence of payment of signature bonuses to determine which of the projects that was awarded to the company.