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Crude Oil March 18, 2019 01:30:58 AM

OML 11 License Not Revoked, NDPC Becomes Operator May 2

Anil
Mathews
OilMonster Author
OML 11 lies in the southeastern Niger Delta and contains 33 oil and gas fields of which eight are producing as per 2017.
OML 11 License Not Revoked, NDPC Becomes Operator May 2

SEATTLE (Oil Monster): The licence for Oil Mining Lease 11 has neither been revoked nor withdrawn from Shell Petroleum Development Company, rather the operatorship of the oil block was transferred from the SPDC to the Nigerian Petroleum Development Company.

Senior officials from the Federal Ministry of Petroleum Resources and others in the OML 11 joint venture explained that the directive from President Muhammadu Buhari to the Group Managing Director of the Nigerian National Petroleum Corporation, the parent firm of NPDC, was that the operatorship of the block should be taken over by NNPC.

Sources familiar with the issue told our correspondent in Abuja on Friday that aside from the fact that the process of getting back the licence for such oil block was tedious, the joint venture partners in OML 11 were not just NPDC and SPDC.

They stated that two other international oil companies, Total and Agip, were also partners in the oil block.

This came as stakeholders in the oil sector expressed concern over the presidential directive and urged the Federal Government to be more transparent in handling the matter.

The PUNCH reported on Wednesday that Buhari had ordered the NNPC to take over the operatorship of the entire OML 11 from the SPDC.

According to a letter from State House, Abuja to the Group Managing Director of NNPC, dated March 1, 2019, with reference number SH/COS/24/A/8540 and signed by the Chief of Staff to the President, Abba Kyari, the President’s directive was clearly stated that the entire operatorship of OML 11 should be taken over by the NNPC/NPDC not later than April 30, 2019.

The NPDC is the flagship oil exploration and production subsidiary of the NNPC and the liaison office of the company acknowledged the receipt of the letter on March 5, 2019.

The letter from the Presidency to the NNPC, which had its title as, ‘Operatorship of Entire Oil Mining Lease 11,’ read in part, “Kindly note that the President has directed NNPC/NPDC to take over the operatorship from Shell Petroleum Development Company of the entire OML 11 not later than 30 April 2019 and ensure smooth re-entry given the delicate situation in Ogoniland.”

It added that the President has “directed NNPC/NPDC to confirm by 2 May 2019 of the assumption of the operatorship.”

Following the presidential directive, it was widely speculated that the President had withdrawn the licence of Shell, but this was refuted by partners in the JV as well as informed officials at the FMPR.

“What the directive of the President is all about is operatorship. The letter is very clear that operatorship should be transferred from one party of the JV to another party. I’ve seen a copy of the letter and it did not talk about the licence. There is no mention of withdrawal or revocation of licence in that letter,” an official in one of the firms in the joint venture, who spoke to our correspondent in confidence, said.

An official at the FMPR also stated that “whoever says the letter mentioned withdrawal or revocation of licence is just being unnecessarily sensational about that letter because there was nowhere in the letter where such was mentioned. The letter is very clear that operatorship should be given to another party.

“How can you operate if you are revoking the license? If you withdraw the license, who will operate the field? This is because you have to go through another round of processes before you can get the licence. Shell and NPDC are not the only partners; Total and Agip are also involved.

“So the license is held on behalf of the partners and as we speak, the holder of the license on behalf of the partners now is NPDC, of course. If the license was revoked, do you think the NPDC will continue to run the asset? People don’t understand the scope of OML 11. They think OML 11 is just Ogoniland. No, that’s just a small fraction.”

OML 11 lies in the southeastern Niger Delta and contains 33 oil and gas fields of which eight are producing as per 2017. In terms of production, it is one of the most important blocks in Nigeria.

 Courtesy: www.punchng.com


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