THE directive by President Muhammadu Buhari, who doubles as the Minister of Petroleum Resources, for the takeover of operatorship of the Oil Mining Lease (OML) 11 by the Nigerian National Petroleum Corporation (NNPC) through its upstream subsidiary, the Nigerian Petroleum Development Company (NPDC), has been deemed to be in order.
Speaking to Saturday Tribune on the development, an oil and gas lawyer, Mr Ghaniyu Adeyemi, stated that the Petroleum Act of 1969 (as amended) empowers the Minister of Petroleum Resources to grant or revoke the exploration, prospecting and production rights of the operating companies.
“The Petroleum Act 1969 (as amended) is the most important legislation that regulates the oil and gas sector. Irrespective of the circumstances, the petroleum minister has the power to revoke or renew any licences he so desires. So, there is no issue for concern on this matter.
“In fact, I doubt it if Shell will contest such directive in any court because it has been part of the Joint Operating Agreement (JOA) for the OML 11,” Adeyemi said.
An oil and gas trader, Olabode Agboola, sakid, “I saw it coming since the Federal Government has refused to renew the licence which expires in June 2019. It is expected that Shell, like other multinationals, will take advantage of the early renewal opportunity given by the Federal Government late 2018.”
He, however, argued that Shell had in 2018 applied for the renewal of the licence for another 20 years but the Department of Petroleum Resources (DPR) proposed to split the acreage into three because of its large size.
He also stated that Shell was also discussing with potential investors to sell its stake in the oil block as part of its divestment programme.
“OML 11 was actually under a divestment programme Shell was talking with a Nigerian company to acquire its stake since the Ogoni people have vowed that they would not allow the company into their land. Shell has been refused access to the oil block by the communities for upwards of 26 years,” he said.
On the implications of becoming the operator of OML11, Agboola opined that it would boost the crude oil production of the NPDC.
“The NPDC currently produces about 165,000 barrels per day. The government has a target for NPDC to be producing 500,000 bpd. This target may be responsible for such a big move. And I am sure the people of Oginiland will be very pleased to welcome NPDC as against Shell,” he said.
OML 11, one of the most important oil blocks in Nigeria, in terms of oil and gas production, lies in south-eastern Niger Delta and contains 33 oil and gas fields, including Bodo, Bodo West and Yorla fields.
According to a letter dated March 1, 2019, with reference number: SH/COS/A/8540, signed by the Chief of Staff to President Muhammadu Buhari, Malam Abba Kyari, addressed to the Group Managing Director of the NNPC, Dr Maikanti Baru, the president had directed the corporation and its upstream subsidiary, the NPDC, to take over the operatorship of the entire asset and also confirm presence at the field by May 2.
SPDC had operated the block until 1995 when Ken Saro-Wiwa was hanged by the military regime of the late General Sani Abacha.
Following the execution of the environmental activist, the Ogoni people, who had sacked Shell from Ogoni since 1993, also denied the oil giant access to the oil blocks.
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