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Heritage Oil Defends Acquisition of OML 30

16 Jan 2013

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Group Managing Director of the NNPC, Mr. Andrew Yakubu

By Chika Amanze-Nwachuku and Chineme Okafor, with agency reports

United Kingdom-listed Heritage Oil has defended its acquisition of a 45 per cent stake in the Oil Mining Lease (OML) 30, despite demands by the Trade Union Congress (TUC) that the deal be cancelled, given the controversial past of the firm’s Chief Executive Officer, Tony Buckingham.

The reaction came as Italian oil firm, Eni, lifted its last force majeure on Nigerian oil exports, easing supply problems caused by flooding and theft in the Niger Delta.

Defending its role in the oil block acquisition in an e-mailed statement to Platt Tuesday, Heritage said details of the transaction were fully disclosed when the deal was signed and that final approval had been granted by the Nigerian Government.

The company said the acquisition, which had since been approved by the government, was successfully completed in November.

“The acquisition was made in partnership with Shoreline Energy, a leading private Nigerian energy and infrastructure company, which was founded in 1997. OML 30 will be operated by the Nigerian National Petroleum Corporation (NNPC), which also owns 55 per cent of the asset,” the company said.

In June last year, Heritage teamed up with a Nigerian company, Shoreline Power Company to buy the 45 percent stake in Nigeria for $850 million in a move that the UK firm said would transform the company. The company had in November announced the successful completion of the acquisition of the stake in the OML, one of Nigeria’s most prolific oil blocks.

However, the deal recently elicited reactions from the TUC, following revelation by THISDAY last week that a key player in the deal, Buckingham, the founder and leading shareholder of Heritage, boasts of less than salubrious past.
President of the TUC, Peter Esele, at the weekend called on President Goodluck Jonathan and the Minister of Petroleum Resources, Mrs. Diezani Alison-Madueke, to do everything in their power to rescind the transaction, pointing out that by the sale, Nigeria had become the “laughing stock in Europe over the deal.”

Esele said labour unions would hold the petroleum ministry responsible for failing to carry out due diligence on Heritage and its ownership before approving the sale of the asset.

OML 30 was the most promising of five oil blocks put up for sale by Shell (30 per cent), France’s Total (10 per cent) and Italy’s Eni (10 per cent) in 2011. The block covers eight producing fields and associated infrastructure, including nine flow stations with a combined capacity of more than 400,000 b/d and a segment of the 850,000 b/d Trans Forcados pipeline.

OML 30 is estimated to have gross proved and probable reserves of 707 million barrels of oil and 2.5 Tcf gross reserves of gas.

But Eni’s lifting of its last force majeure on oil exports, Reuters reported, will ease supply problems caused by recent flooding and crude theft in Nigeria.

The Italian oil company first declared force majeure, a clause that means a company will not be able to meet its contractual obligations due to events beyond its control in early November. Traders had reported delays of more than a month for Brass River crude, which typically accounts for around 5 per cent of total Nigerian exports, the newswire quoted an unnamed trade source to have said.

“The force majeure has been lifted effective 0800 Nigerian time (0700 GMT) on Tuesday January 15,” the agency added.

In the meantime, the NNPC has dismissed speculations that the recent fire incident on its System 2B pipeline located at Arepo in Ogun State would cause another bout of fuel scarcity in Lagos and its environs.

Group Managing Director of the NNPC, Mr. Andrew Yakubu said in a statement Tuesday that the product supply and distribution were intact as ruptured points on the pipeline had been fixed.

Yakubu clarified in the statement signed by the corporation’s General Manager Governmental Affairs, Tumini Green, that speculations of imminent petrol scarcity were uncalled for in view of its quick response to the situation.

The GMD had during an on-the-spot assessment of the damaged pipeline on Monday, explained that the four points that were ruptured by the product thieves had been clamped and that the corporation was also working out a way to make the pipeline less accessible to oil thieves and vandals.

“There is no reason to entertain fear about fuel scarcity because we have enough products in Mosimi to last for some days, but beyond that our men have already clamped the four points that were ruptured and there is no fear of disruption of distribution and supply as such.

“This is a stop gap measure. We just made some observations now on how to make the pipeline less accessible, if we are able to achieve that within the day we will start pumping,” Yakubu said.

On the allegation of negligence against the Governor of Ogun state, the GMD explained that the corporation’s mandate was to operate and maintain the pipeline and its right of way and that he had written to the governor soliciting for the state government’s collaboration to check the menace.

He added: “We are glad that His Excellency has opened up that he would collaborate with us.”

Tags: Business, Nigeria, Featured, Heritage Oil, Acquisition, OML 30

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