Pan Ocean Oil Corporation loses Oil Bloc
The Department of Petroleum Resources (DPR) has officially handed over the Oil Mining Licence (OML) 98 to the Nigerian Petroleum Development Company, a subsidiary of the Nigerian National Petroleum Corporation (NNPC).
Speaking at the hand-over on Friday in Abuja, Mr Sarki Auwalu, DRP Director and Chief Executive Officer, said that the licence was revoked from its operators Pan Ocean oil corporation over non remittance of royalties.
OML 98 is the only asset belonging to a Joint Venture (JV) between NNPC and Pan Ocean Oil. OML 98 is located in the onshore Niger Delta.
The acreage was originally awarded to Pan Ocean in 1971 as OPL 71 and was converted into OML 98 in 1975. Production from the JV started in 1976
OML 98 is an asset that is prolific.
The 2P reserve is about 43 million barrels with 20 million barrels of condensates, with over 383 billion SCF of gas.
These assets is supposed to work.
“There is an obligation for each and every company that they need to pay to government; and the first line charge is royalty. If a company is not paying royalty, it means the company is not performing.
“So government is invoke its own right to revoke the asset and give it to somebody that would pay that royalty to the Nigerian people; because royalty is what Nigerians really take out of the business.
“All the investors they would come, we would give them opportunities by giving them the assets; they would put in their money and they would give certain royalties, concession rentals and other revenue to government.
”That is really what government takes from the asset, the resource; whether it is oil, condensates or gas.The reason for the revocation is failure to meet obligations of that asset to government,’’ he said
He said that five other licences that were revoked alongside OML 98 were revoked for the same reason adding that government was looking at for the best people to transfer the assets to for maximum utilisation and benefits.
“Why, because, we want the assets to work and we want Nigerian people to benefit from the resources they were blessed with ,so, the fate of the others will be similar to this and government is looking at the best way to operate the assets for Nigerians to benefits.’’ he added
He said that NPDC got the asset for its proven confidence in operations over the years.
“This is a company that 15 years ago they could not show to drill up to 10,000 barrels but now, our NPDC can produced over 150 million barrel per day .
“It shows that now, Nigeria has come of age, we have company of our own, 100 per cent Nigerians, operate by Nigerians and work for Nigeria and we are ready to transport skills.
“NPDC have fantastic good skills, there is no white man working in NPDC, drilling, production 100 per cent Nigeria, we are proud of them and we need to support them. This is our own made in Nigeria, by Nigeria and for Nigeria,’’ he said.
According to him, that is why government thought it wise handing over the OML 98 to them as it is our own company to make sure that Nigeria works.
He noted that the handing over of the assets to NPDC means that Nigeria oil and gas sector had grown adding that the policy idea was to ensure that Nigeria take charge of its resources.
Auwalu urged the company to be responsible and ensure that it operated with ultimate transparency and develop the asset for the benefit of Nigeria.
He noted that government would not spare any body found wanting
Ferdnard Bariwer, General Manager Exploration and Development Division, NPDC said that the company would look at the asset and sort the best things to do to move forward.
“I strongly believe that we are doing more studies already, other activities; we will look at the OMLs and see the quick wins to start producing as soon as possible to meet the expectation of the nation.
“I assure you, I have been in NPDC since 1987 and I know the capability that we have , I assure you the government and everybody that NPDC is capable of handling the OML,’’ he said
He said that currently the company was producing about 200,000 barrel and working hard to move to between 300 and 500 barrel per day.
“Before the year will run, you will hear from us how much we are producing,’’ he said.
Bariwe represented the Managing Director of NPDC, Mansur Sambo.
Also, Mr Olajide Ishola, Chief Operation Officer Pan Ocean Oil Corporation said that the asset was given to Pan Ocean 1973 and production started in 1976.
“So, we have operated the asset for 43 years, we are a responsible company , however, as thing went the way it went, this revocation is really not new as its been done since March last year.
“ Today, is not a sad day, because since March last year that the revocation has been done, a lot of things has been left in limbo.
”This meeting of today sets the tone for the handover and the future of the asset, and also for those things left in limbo, like what do we do to the staff; the oil that has been produced, that was warehoused and not sold, not shared and all t he rest.
“I want to reiterate that as Pan Ocean, we will cooperate with NPDC and all relevant stakeholders to ensure that the directive is carried out for the benefit of Nigerians,’’ he said
Commenting on the Legacy debts, he said it would d be worked on and sorted by the NPDC as the new operator.
“We would work along and cooperate with them to ensure it is done properly,’’ he added.