06 September 2013, Lagos – The Nigerian National Petroleum Corporation, NNPC, says it will revoke the operating licenses of the three oil blocks put up for sale by Chevron Nigeria upon their acquisition by a new investor.
The Nigerian National Petroleum Corporation, in a notice, Thursday, issued a caveat to proposed buyers of the three oil blocks offered for sale by Chevron, saying that acquisition of the blocks does not guarantee automatic license to operate the blocks.
According to a notice by the NNPC, the warning becomes necessary in the light of recent high level interest shown by various investors in the ongoing divestment programme for Oil Minerals Licenses, OML, 52, 53 and 55 by Chevron Nigeria.
The NNPC stated that although Chevron currently operates the blocks, the right to take over the operatorship of the oil blocks rests with the NNPC, being the majority shareholder with 60 per cent stake compared to Chevron’s 40 per cent.
The NNPC said, “Chevron shall cease to be the operator upon assignment of their participating interest.
Therefore prospective buyers should note that automatic operatorship does not come with the acquisition of any of these blocks.
This warning comes as the US-based Chevron is planning to sell its minority stakes in a joint venture it has with NNPC in five oil blocks.
Analysts say this is a response to Nigeria’s move to increase its direct ownership of its oil and gas sectors through local firms, a move that has resulted to major foreign oil companies disposing of their assets in Nigeria.
Not having operatorship poses significant risks for any would be investors in the fields despite Nigeria Petroleum Development Company, NPDC, NNPC’s development subsidiary, lacking the requisite finance and expertise as it always involved third party operator in its operations.
But the notice is seen as a calculated bid to avoid unnecessary tussles, the type that ensued when Shell sold some oil blocks two years ago.
In that instance, the buyers, including Poland’s Kulczk Oil Ventures, UK-based Heritage Oil (HOC.TO) and independent energy firm Eland Oil (ELA.L), thought they had also purchased Shell’s operatorship but NNPC, as majority owner, handed management of the fields to its subsidiary, saying it wanted to increase the amount of oil it produces and not give away rights to other companies.
– Jonah Nwokpoku and Zino Magbegor, with agency report
