NNPC to take over operatorship of oil mining lease

The Federal Government has directed the Nigerian National Petroleum Corporation (NNPC) to take over the operatorship of the controversial Oil Mining Lease (OML) 11.

OML 11 lies in the southeastern Niger Delta and contains 33 oil and gas fields of which eight are producing as per 2017. In terms of production, it is one of the most important blocks in Nigeria. The terrain is a swamp to the south with numerous rivers and creeks.

Shell Petroleum Development Company (SPDC) is the operator of OML 11.

The oil giant has been looking for a local investor to sell its stake to, but success has not been recorded.

According to a memo titled “Operatorship of Entire Oil Mining Lease (OML) 11” signed by the Chief of Staff to the President, Abba Kyari, dated 1st March 2019 and addressed to the Group Managing Director (GMD), NNPC, Dr. Maikanti Baru, and sighted by Tribune Online, the President directed “NNPC/NPDC to take over the operatorship from Shell Petroleum Development Company (SPDC) of the entire OML 11 not later than April 30th 2019 and ensure smooth re-entry given the delicate situation in Ogoniland.”

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It also directed NNPC/NPDC to confirm by 2nd May 2019 of the assumption of the operatorship.

Recently, the Federal Government has denied SPDC renewal of OML 11, but decided to split it into three because “it is too large (2,800spkm).”

Shell has 45 per cent stake in OML 11 while the Federal Government through the NNPC has 55 per cent but Shell has been the operator of OML 11 but has not been operating the oil fields due to its role in Ogoniland crisis.

Shell has continued to face opposition in the region, with some reports suggesting local people even blocked the company from accessing some parts of the delta for years. This has left Shell with undeveloped oil and gas reserves.

When contacted, the spokesman for Shell Nigeria, Bamidele Odugbesan, said “no comment.”