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Transfer of OML 11 to NPDC: Ogoni vows to resist resumption of crude, gas production

The presidential directive to the Nigerian Petroleum Development Company Limited (NPDC) to takeover operation of the entire Oil Mining Lease (OML) 11 from Petroleum Development Company (SPDC) has been denounced by the Ogoni people.Professionals are also worried that the planned takeover from SPDC not later than April 30, 2019, blatantly undermines due process as stipulated by extant regulations, disregards the Ministry of Petroleum Resources, the board of Nigeria National Petroleum Corporation (NNPC), as well as other parties involved.

Consequently, the Ogoni people are warning that any attempt to resume crude oil and gas production using the takeover as a smokescreen, without addressing fundamental issues that led to the Ogoni struggle would be stoutly resisted. Other critical stakeholders, who equally see the development as an illegality that must be challenged in the law court say they smell a rat for such an order to be generated from the Office of the Chief of Staff to the President, as against the Ministry of Petroleum that has the statutory authority.
According to them, by overriding the board of the NNPC chaired by the Minister of State for Petroleum Resources, Ibe Kachikwu, they have validated the power play, which has reportedly prevents him from taking key decisions, consequently limiting the growth of the sector.

OML 11 is regarded as one of Nigeria’s most important oil assets, containing 33 oil and gas fields. Eight are reportedly producing. The lease is currently being operated by a Joint Venture of which the NNPC owns 55 per cent, Shell 30 per cent, Total 15 per cent, and Agip five per cent.
It is governed by a Joint Operating Agreement (JOA). Any JOA has two types of parties: The operator and non-operators. The operator is the leader of the consortium, as this is the person responsible for conducting the daily operations in the name of the consortium. For decisions to be made, the parties must jointly reach a consensus.
A memo signed by the Chief of Staff to the President, Abba Kyari, dated March 1, 2019 with reference number SH/COS/24/A/8540, directed the corporation to take over OML 11 from Shell.The letter directed “NNPC/NPDC to take over the operatorship, from Shell Petroleum Development Company, of the entire OML 11 not later than 30 April 2019 and ensure smooth re-entry given the delicate situation in Ogoni Land.

The Guardian

AmarSim Associations Development Consultants

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