...When OML 30 Slipped through Adenuga’s Grasp

11 Jan 2013

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Mike Adenuga

In April 2011, Conoil, belonging to telecoms, banking and oil and gas mogul, Dr. Mike Adenuga Jnr, won the bid for the acquisition of the Oil Mining Lease (OML) 30, reputed to be one of Shell’s most prolific onshore oil block in the western Niger Delta.

However efforts by Conoil to acquire the block was thwarted following the decision by the Nigerian Petroleum Development Company (NPDC), the exploration and production subsidiary of the Nigerian National Petroleum Corporation (NNPC), to assume operatorship of the block.

Conoil had offered $1.29 billion for the OML 30, having been assured that Shell would transfer the operatorship to it. Conoil, which had defeated African Petroleum Plc (now Forte Oil Plc), belonging to Femi Otedola, which had bid $850 million, and Oando for the OML 30, had gone as far as making overtures to the Federal Government and the Ministry of Petroleum Resources to allow it operate OML 30 for five years, after which it shall revert to NNPC/NPDC.

But the request was turned down by NNPC, which maintained that OML 30 and 34 hold some of the country's largest gas fields (Utorogu, Ughelli East, Kokori and Olomoro), and are too strategic to be left in the hands of indigenous operators. It also argued that the Joint Operating Agreement (JOA) provided that operatorship of the block shall be transferred to NNPC in the event that any of the joint venture partners (including the operator) elected to sell their interest in the block to a third party.

Minister of Petroleum Resources, Mrs. Diezani Alison-Madueke, had in an interview in 2011, stated that the blocks are too important to be left in the hands of indigenous operators, because they hold some of Nigeria’s major gas fields which are important to the country’s power infrastructure programme.

Conoil's acquisition was to be financed by Standard Chartered Bank, UK, in conjunction with a local banking syndicate led by United Bank for Africa Plc. Other members of the local syndicate were First City Monument Bank Plc and another bank whose name could not be ascertained at the time of this report.

In compliance with the tender rules for the block, Adenuga had parted with a non-refundable deposit of 10 per cent of the bid sum. However, when he could not secure the government’s commitment to transfer operatorship to Conoil, he withdrew from the transaction and stood the risk of losing $129 million to Shell and its partners.

But being a dogged fighter, Adenuga was able to use his extensive contacts in government to apply pressure on Shell to refund most of the $129 million deposit, enabling him to walk away from the deal relatively unscathed.

Tags: Business, Nigeria, Featured, OML, ADENUGA

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