NNPC denies transferring NPDC equity, operatorship to third parties

NNPC headquarters14 February 2014, Abuja – The Nigerian National Petroleum Corporation, NNPC, on Thursday said it did not allocate to itself, nor take over or transfer the equity or operatorship of blocks by its upstream subsidiary, the Nigerian Petroleum Development Company, NPDC, to third parties.

The Central Bank of Nigeria, CBN, governor, Lamido Sanusi, had told the Senate Committee on Finance probing the NNPC that the national oil company had transferred its equity stake-holding in NPDC operated eight oil blocks to Atlantic Energy and Septa Energy Nigeria Limited, a subsidiary of UK-based Seven Energy to use in raising finance, to produce and sell oil. Mr. Sanusi alleged that the proceeds belonging to Nigeria from the arrangement was not paid to the federation account..

The oil blocks vacated by Shell Petroleum Development Company, SPDC, include oil mining leases, OMLs 4, 38 and 41 to Septa Energy; OML 26 to First Hydrocarbon Nigeria and Afren; OML 42 to Neconde and Kulcyzk Oil; OML 30 to Shoreline and Heritage Oil; OML40 to Elcrest and Band Oil and Gas, and OML 34 to ND Western and Petrolin.

Mr. Sanusi had accused Atlantic Energy and Septa Energy, which signed a number of strategic alliance agreements, SAAs, with the NPDC, of diverting a substantial amount of what constitutionally belonged to the federation without due process.

The CBN governor accused the NNPC of engaging the two companies as Special Purpose Vehicles, SPV, to operate the oil blocks as technical partners, despite their inexperience, and sharing among themselves the proceeds, which should have been paid into the Federation Account.

But, in its response, the NNPC denied taking over any oil block. It said the assignment of interests in oil blocks to the NPDC adhered strictly to statutory procedures.

“NNPC is not in a position to take away any oil block or allocate same to itself as it does not have such powers,” the Group Managing Director, NNPC, Andrew Yakubu said. “There is a statutory procedure for the assignment of interest in blocks which was adhered to in the case of NNPC’s assignment of interest to NPDC”

Mr. Yakubu also denied any action to transfer the operatorship or equity in the oil blocks to any third party, pointing out that there was no operation of the asset by the SAA counterparties, as NPDC is the operator of the blocks.


– Premium Times

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