Yemisi Izuora
The Group Managing Director of the Nigerian National Petroleum Corporation (NNPC), Mele Kyari has clearly informed of government decision to cede some expired oil fields to its subsidiary, the Nigerian Petroleum Development Company (NPDC).
Oriental News Nigeria, reports that only last month the Department of Petroleum Resources, DPR, confirmed the revocation of licenses of six oil blocks for non-payment of royalties, even as there are indications that more licences are on the line for revocation.
This is barely a month after the Ministry of Petroleum Resources, issued a request to the Federal Government for the revocation of five Oil Mining Licenses, OML, including OML 98, OML 120 and 121, OML 108, OML 110 and one Oil Prospecting License, OPL 206. Owners of the blocks include: Pan Ocean Oil Corporation (OML 98); Allied Energy Resources Nigeria, (OML 120 and 121); Express Petroleum and Gas Company (OML 108); Cavendish Petroleum Nigeria (OML 110) and Summit Oil International (OPL 206).
The DPR explained that the action was based on a presidential directive to recover legacy debts owed by the companies operating the licences. The revoked licenses are located in the onshore, shallow and deepwater areas of the Niger Delta basin. Pan Ocean is owned by Festus Fadeyi, billionaire businessman, while Allied Energy, which is now known as Erin Energy, has Kase Lawal, founder of Camac Energy, as its chairman. Express Petroleum, operators of OML 108, is technically managed by Shebah Exploration & Petroleum, a company owned by Bryant Orjiako, Chairman of Seplat Petroleum Development Company, while Cavendish Petroleum has Mai Deribe as its chairman. Summit Oil International, operators of OPL 205, also known as the Otien field, was co-founded by the late MKO Abiola.
Kyari while receiving a delegation from ENi/Agip led by the Executive Vice Chairman, Sub-Saharan African Region and Chairman ENI Exploration and Production in Nigeria, Mr. Brusco Guido, in Abuja Tuesday said, “On the issue of some of the expired assets, the there is no immediate plan to renew the licenses as the Federal Government is interested in having the exploration and production arm of the NNPC, the Nigerian Petroleum Development Company (NPDC) operate them.”
He however, promised to work closely with ENI/Agip to speedily resolve all pending issues that led to the suspension of cash-call repayment.
Kyari, explained that the failure to pay cash call arrears in the last three months was deliberate and meant to ensure that the issues surrounding the agreement settled.
“The money is there, it is ready. We will pay as soon as the issues are resolved by the end of the week”, Mele Kyari stated.
NNPC said it had suspended cash call repayments to Eni for three months and did not plan to renew some of the Italian firm’s asset licences.
The Corporation owes billions of dollars to international oil companies, including Eni, its share of operating costs for their Joint Ventures, JV.
It was gathered that of the original $5 billion owed two years ago, part of the outstanding was repaid through the cash calls system, with about $3 billion now hanging.
But NNPC has withheld three months’ payment to Eni over a set of disputes. Delayed payments for the cash calls have hindered development of some of the country’s oil assets.
Among the issues raised by NNPC are that Eni’s licences for some oil assets have expired, but government has not plan to renew them as it wants the state oil firm to take over, but the NNPC did not specify which of Eni’s licences it would not renew.
On the Okpai Independent Power Project, Mele Kyari, explained that the issues that led to the delay in payment have been resolved and that payment would be effected as soon as possible.
“We will work with you. You can count on us”, he assured the Agip team, urging them to fast-track the Phase 1 of the rehabilitation of the Port Harcourt Refinery to ensure that it was delivered before the scheduled date of October 2019.
Speaking earlier, the Executive Vice Chairman, Sub-Saharan African Region and Chairman ENI Exploration and Production in Nigeria, Mr. Brusco Guido, said the company was fully aligned with the GMD’s three-point agenda of growing reserves, growing production, and cutting cost.
He, however, listed a number of challenges that had hampered its operation and urged the NNPC Management to help resolve them in order to meet its target of growing production from the JV assets by 30 per cent over last year’s rate.