A Review of the Nigerian Energy Industry

Nigeria returns ExxonMobil’s oil mining leases, renews other licences

Oscarline Onwuemenyi

21 February 2012, Sweetcrude, ABUJA – The Federal Government has promised to return oil mining leases (OMLs) 67, 68 and 80 that were revoked last year to ExxonMobil.

The Minister of Petroleum Resources, Mrs. Diezani Alison-Madueke, who made the assurance in her speech on Tuesday at the on-going Nigerian Oil and Gas Conference (NOG) 2012, in Abuja, said that the affected oil wells will be returned to ExxonMobil today.

According to her, “I will sign the lease agreements tomorrow (today) and ExxonMobil will return to sites.”

She added that, “We are looking at Mobil oil licence to ensure that it is done within all the right particulars. The last exercise took a little while but it has been concluded in the best interest of the parties and I think they are satisfied with the price.

“Therefore, we are now ready to go ahead and sign and I will sign tomorrow (today). Immediately after that, the other renewal will follow because this is competitive in terms of other renewals.”

OML grants the right to exploration, production, transportation and disposal of production, all in accordance with the Petroleum Act Cap 350 LFN and other Acts that govern or regulate petroleum operations as applicable. However, the Federal Government revoked the leases on the premise that due diligence was not followed.

OML 67, 68 and 70 at the Qua Iboe oil fields located on the Atlantic coastline in Akwa Ibom.

ExxonMobil had pledged to work with the petroleum resources ministry to resolve the impasse. “We will work with the Minister of Petroleum Resources and other relevant government officials to resolve any confusion that may exist on this matter. We have a long-standing association with the government of Nigeria and look forward to continuing that mutually beneficial relationship,” it stated.

Allison-Madueke had informed ExxonMobil in May 4, 2011, that it had lost all rights on the three blocks, which pump 580,000 bpd and 950 MMCFD of gas. These three fields form a crucial production centre for ExxonMobil and supply the Qua Iboe terminal.

Alison-Madueke also touted some achievements made in the industry since the assumption into office of President Goodluck Ebele Jonathan on May 29, 2011, noting that the oil and gas sector has witnessed a renewed wave of activities and performance levels which have placed the industry on a renewed path of growth and sustained development.

She said, “In the upstream sub-sector the nation’s actual crude oil (+condensate) production rose to an average of 2.39 million barrels per day, consistently maintained above the budgeted production level of 2.30 million barrels per day. In fact, today, we are even seeing production records of 2.5 million barrels of oil and condensate per day.

“Similarly, gas sales rose by more than 70% to an average 4 billion standard cubic feet per day in 2011 and for the first time, industry supplied more domestic gas than was consumed by the power and industrial sector.”

The Minister observed that the Nigerian Liquefied Natural Gas company (NLNG) had one of its most successful years, with production peaking at 21.2 Million metric tons in 2011 alone. Thanks, in no small part, to the amnesty programme which allowed unhindered access to oil and gas operations and activities.

“Exploration efforts continued in the Chad and other frontier inland basins. At this time, the Nigerian National Petroleum Corporation and the Federal Ministry of Petroleum Resources are concluding arrangements for contract awards for advanced seismic data acquisition and processing, to enhance subsurface imaging and evaluation of prospectivity.

“A major enhancement of deepwater oil production was achieved as a result of the arrival of FPSO Usan into the Nigerian waters. On completion of the subsea wells and facilities tie-in, in a few weeks, oil production will increase by about 180,000 barrels per day,” she added.

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  • Ikechukwu Okugo

    pls where can i get a list of the oil mining licenses in Nigeria and the companies that were given such licenses.
    Thank you