31 May 2017, Sweetcrude, Abuja — Trouble is brewing in the Niger Delta region over the decision of the Federal Government to cancel Oil Prospecting Licences (OPL) 2001, 2002 and 2003 in the Utapate Field initially awarded to investors from states in the region.
The investors affected by the cancellation by President Muhammadu Buhari are Jahcon International Limited, Hi Rev Exploration and Production Limited, and Oil and Industrial Services Limited.
Giving a historical perspective on the issue, the investors who chose not to name because of the sensitive nature of the matter, disclosed that after they won the bids for the blocks in 2007, the bid round was stalled for eight years by litigation until it was resolved amicably in 2015.
After the resolution, the investors disclosed that the Department of Petroleum Resources, DPR, handed offers of OPLs 2001, 2002 and 2003 to Jahcon International Limited, Hi Rev Exploration and Production Limited, as well as Oil and Industrial Services Limited, respectively.
The investors said two of the firms, Jahcon International Limited and Oil and Industrial Services Limited made complete payments, while Hi Rev Exploration and Production Limited made part payment and is still in the process of completing its transaction with the DPR.
According to them, regardless of all these, President Muhammadu Buhari approved a request by the Nigerian National Petroleum Corporation, NNPC, demanding the withdrawal of the licenses from the investors and handing over the oil blocks to the Nigerian Petroleum Development Company, NPDC, a subsidiary of the NNPC.
The investors told journalists that many Niger Delta indigenes were pained by the action of the President in revoking the licenses of citizens from the oil-rich region without carrying out thorough consultations.
The investors stated that angry youths were already threatening to stop any attempt by the NPDC to commence work on the oil field, adding that traditional rulers, as well as investors who won the blocks during the bid round, had been engaged in calming several agitators.
The investors noted that although the court had directed all parties to stay action with respect to working on the field, officials of the NPDC recently made moves to commence activities on the field.
Reacting to the issue, spokesperson of the NNPC, Mr. Ndu Ughamadu stated that the case was in court and that the NNPC and its subsidiary, NPDC, would abide by the rulings of the court.
He said, “They are in court and we have our representation in the High Court here in Abuja. They have rushed the matter to the High Court, Abuja and to the National Assembly; so what do they want to be done? They should always remember that the President is the Minister of Petroleum Resources and at times he takes a decision based on facts presented to him.”
Again, he said, “I don’t want to comment on what they are dishing out because we are already in court. We have made two appearances in court on this matter. It is only the court that resolves issues like this and if it rules tomorrow that the decision taken on Party A is wrong, then, we will abide by the ruling of the court.
“This, however, is subject to the advice of our legal adviser, because the corporation is a law abiding corporate institution. If they want to exhaust the case in court they should go ahead, but if they want a public debate on it, they should also go ahead, for they are also at the National Assembly on this matter.”
Furthermore, copies of the letters which were issued to the investors on June 16, 2015 by the Department of Petroleum Resources, DPR, were made available to journalists, in which the DPR confirmed the three investors as successful bidders for the blocks and directed them to make the required payments as signature bonuses for the licences.
In the NNPC’s letter of request to Buhari, dated December 20, 2016, shown to newsmen, the Group Managing Director of the NNPC, Mr. Maikanti Baru acknowledged that OPLs 2001, 2002 and 2003 in OML 13, which were recovered from Shell by the administration of former President Olusegun Obasanjo, were “inadvertently revoked” by Obasanjo’s administration and “back-converted to Greenfield OPL before being resized into OPLs 2001, 2002 and 2003 and offered under the 2007 Licensing Round.”
However, the investors argued that Maikanti’s letter, which insisted that the OPLs belong to NPDC, did not disclose that NPDC also submitted a bid for one of the blocks in the 2007 open licensing round but lost as a result of low bid.
They argued that Baru’s claim that the oil field belongs to NPDC, a core partner in the field when it was operated by Shell, was baseless on the ground that the government revoked the possession of the oil field by Shell and opened it up to investors in the 2007 bid rounds.