Controversy trails sale of OML 40, 42

15 May 2015, Lagos – Controversy continues to trail the transfer of ownership of the Joint Venture, JV, partnership in Oil Mining Leases OML 40 and OML 42 by the Federal Government through the Ministry of Petroleum Resources to Neconde Energy Nigeria Limited and Elcrest Exploration and Production Limited.

NNPC-logo-335x270To this end, the Petroleum and Natural Gas Senior Staff Association of Nigeria, PENGASSAN, and the Nigeria Union of Petroleum and Natural Gas Workers, NUPENG, of the Nigeria Petroleum Development Corporation, NPDC, Benin, Edo State branch, have threatened to shut down production in the oil leases if the transfer is not reversed.

Reuters reported that the unions gave a deadline of today for the government to reverse the transfer or they will shut down exploration activities in the entire oil leases.

The unions had accused the Minister of Petroleum Resources, Mrs. Diezani Allison-Madueke, of stripping the two oil blocks from NPDC, a subsidiary of Nigerian National Petroleum Corporation, NNPC.

In 2011, the Federal Government assigned 55 per cent equity in eight assets divested by the Shell Petroleum Development Company, SPDC to NPDC. The company had since retained the operatorship of most of the assets which included: OMLs 4, 26, 30, 34, 38, 40, 41 and 42.

However, over the past one year, NPDC and Neconde Energy, joint owners of 55 percent and 45 percent stakes respectively, have been engaged in unresolved crisis over the operation of the OML 42. Despite the dispute, the Petroleum Minister had on February 5th, approved the transfer of operatorship of OML 42 from NPDC to Neconde.

The Neconde Chairman, Dr. Ernest Obiejesi, had alleged that NPDC lacked the capacity to continue as operator of the oil block following the decline in production level from 30,000 barrels per day, bpd, achieved as at the period of acquisition from SPDC, the previous operator of the onshore block to 13,000 bpd in 2014.


– Vanguard

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