Petroleum ministry clears air, OML 11 licence not revoked - OrientEnergyReview

Petroleum ministry clears air, OML 11 licence not revoked

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     …NPDC becomes operator to expedite Ogoni clean up

Chibisi Ohakah, Abuja

There were conflicting reports last weekend that the federal government has revoked the Oil Mining Lease 11 directly linked to the protracted Ogoni environmental crises. This followed a written directive from the office President Muhammadu Buhari to the group managing director of NNPC, Maikanti Barau, stating that the operatorship of OML 11 should be taken over by the NNPC/NPDC not later than April 30, 2019.

The statement issued last Tuesday was largely understood in the oil and gas circuit to mean that the OML 11 joint venture partner licence operated by Shell Petroleum Development Corporation has been withdrawn. An impeccable source in the ministry of petroleum resources last weekend cleared the air saying the directive was simply to transfer operatorship of the OML 11 from the joint venture partners to the Nigerian Petroleum Development Company.

The senior ministry official said the recovering the licence from the joint venture partners would not be as simple as ordinary directive from Mr. President. “You should know that the joint venture partners in OML 11 were not just NPDC and SPDC.

There are two other international oil companies, Total and Agip, who are also partners in the oil block alongside shell,” the source informed, adding that the reason behind government action is to ensure smooth clean up of the Ogoni environment, of which the operatorship of the OML 11 will revert to Shell

According to a letter from Aso Rock, Abuja to the NNPC boss, Barau, 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 was clear with his directive 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.

The letter from the Presidency to the NNPC, 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.”

The letter has generated concerns in the oil industry over the status of the OML 11 JVP. 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 petroleum ministry

The source retorted that whoever says the letter mentioned withdrawal or revocation of licence is just being unnecessarily sensational about the directive, pointing out that the Presidents action is not new in the oil industry. “Withdrawing the licence means going through another round of bidding processes before you can get the licence. Shell and NPDC are not the only partners; Total and Agip are also involved. Shell operates the JV on behalf of other partners, and as we speak, the holder of the licence on behalf of the partners now is NPDC,” he said

OML 11, in terms of production, is one of the most important blocks in Nigeria. It lies in the southeastern Niger Delta and contains 33 oil and gas fields of which eight are producing as per 2017. The terrain is swamp to the south with numerous rivers and creeks. Port Harcourt is located in the northwest of the block, while the major yard and logistics base at Onne is located by the Bonny River. The Bonny oil terminal – the largest in Nigeria – and Nigeria LNG are both located in Bonny.

 

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