OpeOluwani Akintayo
Lagos — This November makes it exactly one year since Aiteo Eastern Exploration and Production Limited, operator of Oil Mining License, OML 29 was forcefully ejected from its Nembe field by the host community in Bayelsa state.
The Opu-Nembe community in Nembe-Bassambiri had issued a quit notice to Aiteo last November after accusing the indigenous oil firm of “economic strangulation, ecological destruction, contract racketeering and corporate wickedness”.
“Aiteo is no longer welcome afterwards”, Chief Oriango Oruwari, Chairman of the Council of Chiefs, who addressed the press said after a conference, adding that the sack would take effect from Nov.14.
Aiteo is one of the indigenous Nigerian companies that took advantage of the exit of major international oil companies, like Chevron, ConocoPhillips and Shell that put up their Nigerian onshore licenses for sale.
In 2014, Aiteo bid for and acquired Shell’s OML 29 and Nembe Creek Trunk Line for $2.7 billion.
With its acquisition of Royal Dutch Shell Plc’s 30% stake as well as Total SA of France and Eni of Italy minority stake in OML29 and the Nembe Creek Trunk Line, Aiteo holds the controlling 45% stake in both assets, for which it paid $569 million for Total SA’s stake.
OML 29 includes Nembe, Santa Barbara and Okoraba oil fields. According to Shell, combined production from the fields averaged around 43,000 barrels per day of oil equivalent in 2014. Aiteo holds a controlling equity stake holding of 85% in the consortium that acquired OML29. Other members of the consortium include Tempo Energy Resources – 10% and Taleveras – 5%.
With about 15, 000 thousand barrels per day production from Nembe alone, production deferment at the well amounts to 465, 000 monthly since shut-in last November. This implies that Nigeria lost about 6million barrels oil production due to deferment from Nembe shut-in in one year.
Brent international sold for $83/b at 11:30AM Nigerian Time Friday, and by SweetcrudeReports’ calculation, Nigeria has been denied N190 billion revenue even as the country barely has enough income streams to execute its 2021 national budget.
Oil spill at Barbara field
The firm reported an oil spill from its Santa Barbara South field on Friday, November 5, 2021. The spill occurred from a non-producing well head, according to the report.
In its reaction the management of Aiteo said that the company was yet to ascertain the volume of the crude discharged into the surrounding environment, while admitting that the magnitude was high.
Spokesman of the company, Mr Mathew Ndian-Abasi said the oil firm suspects sabotage and third party interference as the cause.
The Indigenous Petroleum Producers Association, the umbrella body for 24 indigenous E&P operators, had earlier lamented that its members lost between 15 per cent and 90 percent of their production to theft in the last six months.
“The magnitude of this incident is of an extremely high order. Neither the cause of the spill, nor the quantity of leaked hydrocarbon could be determined at the time of the discovery, though containment booms were deployed and recovery commenced immediately around the well head. As an incident of this nature imports, the necessary Oil Spill Notification Report have been promptly communicated to National Oil Spill Detection and Response Agency (NOSDRA), Nigerian Upstream Regulatory Commission(NUPRC) and National Petroleum Investment Services(NAPIMS) as is required by regulation.
“Ultimately, a Joint Investigative Visit, JIV to the spill site was held by all relevant stakeholders, community inclusive. The JIV at the time was inconclusive, owing to difficulties with access due to high pressure of hydrocarbons from the well head. Additionally, immediate efforts to control the leak were aborted due to the high pressure emanating from the well head. Consequently, Aiteo has mobilized a full intervention team with well control specialists and equipment both locally and internationally to arrest the leak,” Aiteo had said in a statement released on Wednesday.
SweetcrudeReports also learnt from a reliable source that the Nembe well is also uncapped, which could further aggravate the relationship between Aiteo and the community in the nearest future should an occurrence of further oil spill is reported in the community.
The unrest between Aiteo and Nembe community started in 2019 after which a lawsuit was filed against the firm, barring it from renewing the OML 29 license which expired on June 30 of 2020. Aiteo already paid $82 million to the Department of Petroleum Resources, DPR for the renewal.
The Nembe had faulted Shell’s divestment to Aiteo, claiming it was “done without resolving the untold negative impact of their operation on the people”
Aiteo had also, earlier this year, dragged Shell to court over what it described as “illegal diversion” of (2,081,678) barrels of crude oil since 2016.
As a result, Aiteo said it had been unable to sign the expected Memorandum of Understanding, MoU with the Nembe communities, leading to the unrest.
