27 May 2014, Abuja – Prospective investors in the ongoing divestment by Shell Petroleum Development Company (SPDC) and its Joint Venture (JV) partners are aggressively lobbying for the operatorship of the four oil blocks.
The private investors, it was gathered are pushing for the federal government to set aside the Joint Operating Agreement (JOA) between the Nigerian National Petroleum Corporation (NNPC) and the international oil companies (IOCs), which vests the operatorship of relinquished oil blocks on the NNPC.
One of the potential investors said at the weekend that with the provisions of the Petroleum Industry Bill (PIB), the JOA has become void and non-operational.
He contended that since the National Assembly and the executive arm of the government have expressed their desire to ensure the passage of the PIB, what should matter in all new agreements in the sale of oil blocks should be the position of the reform bill and not the JOA.
The investor also argued that the NNPC, through the NPDC has not demonstrated sufficient technical and financial competence and capability to be saddled with the operatorship of all the oil blocks that will be relinquished by the IOCs.
He also cited the Strategic Alliance Agreements (SAAs), which the NPDC entered into with other private companies for financial and technical support for the operatorship of the oil blocks as evidence of its inadequate capacity.
“NPDC already has too many oil blocks in its basket and should not be saddled with more responsibility. There is a limit to the number of blocks they can operate successfully because their capacity is not limitless.
“Asking them to operate more blocks is encouraging more SAAs and I don’t think the industry can continue with the current SAA model, given the controversies associated with it. The parliament has probed these SAAs with accusations and counter accusations, flying around,” he said.
He confirmed that there are high level engagements to convince the ministry of petroleum resources to see reasons why the NNPC should allow the new investors to operate the blocks.
Local and foreign companies had formed consortia that are set to over the four oil blocks currently on offer by Shell.
Shell is divesting its 30 per cent stake, while Total and ENI are set to sell 10 per cent and five per cent respectively in four Nigerian oil blocks – Oil Mining Leases (OMLs) 18, 24, 25 and 29.
NNPC shall, however, retain ownership of the remaining 55 per cent in each of the four leases.
NPDC is operating OMLs 26, 30, 34, 40 and 42, previously relinquished by Shell.
Under the ongoing divestment programme, Midwestern Oil & Gas Plc/Mart Resources/Suntrust Oil, under the Erotron Consortium, won the bid for OML 18.
OML 29 and the Nembe Creek Trunkline were won by Aiteo/Taleveras in conjunction with four other companies in the consortium, having submitted a $2.5 billion bid for the assets. OML 29 is the most prolific oil lease under the current asset sale.
Pan Ocean Oil Corporation Nigeria Limited, operator of the NNPC/Pan Ocean Joint Venture, clinched OML 24 valued at between $500 million and $1 billion, while Lekoil, Crestar, GreenAcres/CCC/Signet Petroleum, NDPR/SAPETRO and Essar submitted bids for OML 25.
OML 24 currently delivers 25,000 barrels of oil equivalent per day from three fields and outputs eight million standard cubic feet per day of gas (MMscf/d).
– This Day