Firms Protest as FG Revokes Abiola, Five Others’ Oil Licences

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Some oil producing companies have threatened to challenge the decision of the federal government to revoke their operating licences on six acreages over unpaid debts, THISDAY has learnt.

The federal government, through the Department of Petroleum Resources (DPR), yesterday announced the revocation of six oil block licences granted to five companies.

THISDAY gathered that the DPR, under the Ministry of Petroleum Resources, had earlier requested the federal government to revoke the licences, which has finally been approved.

One of the licences is an Oil Prospecting Licence (OPL), belonging to Summit Oil, founded by the winner of the June 12, 1993, presidential election, the late Chief Moshood Abiola, where hydrocarbon is being explored. Five others are Oil Mining Leases (OMLs).

According to a notice issued yesterday to the industry operators by the apex regulator of the oil and gas industry, the revocation was based on a presidential directive to “recover legacy debts” owed by the companies operating the leases.

The five companies are Pan Ocean Oil Corporation (OML 98); Allied Energy Resources Nigeria, (OML 120 and 121); Express Petroleum and Gas Company (OML 108); Cavendish Petroleum Nigeria (OML 110) and Summit Oil International (OPL 206).

The DPR said it revoked the licences “in furtherance of the presidential directive on recovery of legacy debts owed the federation and in line with the provisions of the Petroleum Act Cap P10 Laws of the Federation of Nigeria.”

Some of the officials of the affected companies told THISDAY on condition of anonymity that they would challenge the revocation.

“Negotiations have been ongoing on these issues for the parties to reconcile the payments but the government’s side was not sincere. They had predetermined motive to cancel the licences and re-award them to other companies. On our part, we will seek redress in the court,” said an official of one of the companies.

An official of another company told THISDAY that ongoing litigations between partners in some of the assets hampered their negotiations with the government.

“Our assets have been subject of litigation and the government should have waited for the court cases between the partners to be resolved before the revocation. This matter will definitely be resolved in the court,” he added.

In revoking the leases, the apex regulator accused the affected companies of “non-compliance with statutory obligations.”

THISDAY gathered that OML 98 was revoked after the negotiations between the Ministry of Petroleum Resources and Pan Ocean failed to resolve the issue of outstanding payment in the joint venture asset between the company and the Nigerian National Petroleum Corporation (NNPC).

OML 98, which started production in 1976, is located in the Northern Delta, precisely in what is known in geological parlance as Depobelt, and in the northern fringe of Niger Delta Basin.

The acreage covers an area of 523 square kilometres in Edo and Delta States, with many fields – Ogharefe, Ologbo, Asaboro, Adolo, Owe, Ossiomo, Ona and Erimwindu.

THISDAY gathered that OML 108 is owned by Express Petroleum but its technical activities are said to be handled by Chief ABC Orjiakor-backed Shebah Exploration and Petroleum Company Limited.

The only OPL affected is owned by the late Abiola’s Summit Oil.

OMLs 120 and 121 have been a subject of litigation between Allied Energy Resources Limited, CAMAC Energy – both Nigerian companies, and Nigerian Agip Exploration Limited (NAE), a subsidiary of Italian oil giant.

The dispute between the NAE, Allied Energy and Camac allegedly arose from the decision of the arbitration award of the London Court of International Arbitration (LCIA), which NAE had wanted to enforce.

The arbitration award was over a dispute regarding a Sale and Purchase Agreement (SPA) concluded in June 2012 between NAE as seller and Allied Energy as purchaser, in which NAE was said to have transferred to Allied Energy Plc the entirety of NAE’s interests and rights in the two leases.

NAE had argued that the payment of part of the price for the transferred interests and rights was deferred to be paid by Allied Energy to NAE.

The company alleged that following the non-payment by Allied Energy, it filed the arbitration at the London Court of International Arbitration in accordance with the arbitration terms provided in the SPA, and the arbitration was concluded on February 14, 2017.