DPR, Seplat Petroleum, Belemaoil for collision over OML 55

20 July 2016, Lagos – The Department of Petroleum Resources (DPR), Seplat Petroleum Development Company Plc and Belemaoil Producing Limited are heading for a collision over the operatorship of Oil Mining Lease (OML) 55, which was recently acquired from Chevron Nigeria Limited, THISDAY has learnt.

Modecai Ladan,

Mordecai Ladan, Director, DPR

Chevron had earlier completed the transfer of ownership of OMLs 53 and 55 to Seplat after a litigation brought against both parties by Brittania-U Nigeria Limited had initially delayed the transfer of the assets.

The ownership of OMLs 53, 55 and a third block – OML 52 is still a subject of litigation as Brittania-U has insisted it won the three leases in a competitive bid conducted by Chevron’s investment bankers, BNP Paribas at a price of $1.015 billion.

On February 5, 2015, Seplat, which is listed in both Nigerian Stock Exchange and London Stock Exchange, announced that it had acquired a 40 per cent working interest in OML 53 from Chevron.
Simultaneously, the company also announced that it had concluded negotiations to purchase 56.25 per cent of the share capital of Belemaoil Producing Limited, a Nigerian special purpose vehicle that had completed the acquisition of a 40 per cent interest in OML 55, also from Chevron.

Seplat’s effective working interest in OML 55 as a result of the acquisition is 22.50 per cent.
Having acquired the majority shares in Belemaoil, Seplat effectively and indirectly became the parent company of Belemaoil and owner of OML 55, which was bought by Belemaoil from Chevron.

THISDAY however gathered that apart from the pending litigation on the three blocks, fresh controversy has hit the OML 55 transaction following the decision of the DPR to transfer the operatorship of the lease to Belemaoil , which was implemented on June 1, 2016.

Investigation reveals that the regulatory agency directed Belemaoil to pay all outstanding loans due to Seplat and take over the operatorship.

A source at Seplat told THISDAY at the weekend that the company was going to court to challenge the DPR’s decision.

“We hold 56.25 per cent share in Belemaoil. So, by law, the company is our subsidiary. It is wrong for DPR to say that Belemaoil is an independent company and should operate the asset as an independent entity. Belemaoil is a subsidiary of Seplat Petroleum,” he said on condition of anonymity.

Seplat Petroleum had acted as technical services provider to Belemaoil.
But Belemaoil was said to have insisted that Seplat did not complete the payment of all the purchase fees as agreed by both parties.

Belemaoil was also said to have alleged that Seplat did not pay all the agreed fees for the acquisition of Chevron’s 40 per cent stake in the disputed asset.

During the handover ceremony of the two assets early this year, an elated Chief Executive Officer of Seplat, Mr. Austin Avuru said: “OML 53 fits neatly within our strategy of securing, commercialising and monetising natural gas in the Niger Delta to supply the rapidly growing domestic market and will further reinforce our position as a preeminent supplier of gas in Nigeria”.

“OML 55 provides us with a number of attractive opportunities to boost oil and gas output, and is consistent with our strategy of prioritising assets that offer near-term production growth, cash-flow and reserve replacement potential in the onshore and shallow water offshore areas of Nigeria,” he added.

OML 55 hit a plateau output of 8,000 barrels of oil per day in the past few months.

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