Petroleum ministry faces $8bn judgment liability

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JOHN AMEH

The Federal Government is at risk of coughing out over $8bn to litigants over disputed “contractual and statutory obligations” by the Ministry of Petroleum Resources, Sunday PUNCH learnt.

In a particular suit before the London Court of International Arbitration, litigants are making claims of $8bn.

In a bid to escape payment of the liability, forensic and legal experts were hired to defend the ministry.

“English lawyers were engaged in this regard,” a 2017 budget document the Minister of State for Petroleum Resources, Dr. Ibe Kachikwu, submitted to the House of Representatives stated.

“The ministry is facing judgment debts situations and litigation resulting from contractual and statutory obligations at home and abroad.

“Notable among the cases is the matter before the London Court of  International Arbitration, with claims US8bn against Nigeria.

“Due to its significance, the Honourable Attorney-General of the Federation appointed forensic and legal experts to defend the ministry,” the document added.

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Already, it proposed to spend N400m this year on “legal services and litigation” that are ongoing.

The document Kachikwu submitted to the House had a total figure of N69.5bn, representing the budget proposals of the Petroleum Ministry and its parastatals.

SUNDAY PUNCH observed that the Department of Petroleum Resources alone took the highest share of N33.7bn.

Out of this figure, the DPR will spend N32.1bn on salaries alone, but will execute only N1.8bn capital projects.

Besides the huge personnel cost, another N534.4m will cover overhead spending.

The Petroleum Products Price Regulatory Agency took the next highest allocation of N9.1bn, with N7.7bn going on salaries.

The main ministry was allocated a total of N2.8bn and will spend N1.8bn on capital projects and pay N730m on salaries.

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A summary of the proposals submitted by the minister showed that out of the total 2017 budget of N69.5bn, the sum of N61.2bn was earmarked for salaries in the ministry and its agencies, while the total provision for capital projects was N7bn.

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