The Federal Government on Friday transferred the ownership of Oil Mining Lease (OML) 98 to the Nigerian Petroleum Development Company (NPDC), the upstream subsidiary of the Nigerian National Petroleum Corporation (NNPC).
This came almost one year after the federal government revoked the Pan Ocean Oil Corporation’s ownership of the asset alongside the assets of five other companies.
The asset, with 2P crude oil reserve of 43 million barrels and 383 billion Standard Cubic Feet (SCF) of gas, was awarded to Pan Ocean in 1973 and the company commenced production the same year.
However, the company’s licence to OML 98 was revoked in 2019 for failing to meet up with its financial obligations to the government.
The Director of the Department of Petroleum Resources, Engr. Sarki Auwalu, told journalists at the handover of the OML 98 to the NNPC/NPDC that the transfer of the asset was to ensure that Nigerians get best returns from the oil and gas asset.
He said: “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. This asset is supposed to work. There is an obligation for each and every company that they need to pay to the government, and the first line charge is royalty. If a company is not paying a royalty, it means the company is not performing.
“So the government invoked 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 the failure to meet the obligations of that asset to the government.”
The DPR chief said similar fate awaits the five other assets whose licence was revoked last year, adding that the decision of the government to hand over the asset to the NPDC was in line with its policy that Nigerians should take full charge of the country’s resources.
Latest posts by Ripples Nigeria (see all)
- N702M FRAUD: Court fixes date to hear Okupe’s application for foreign medical trip - February 25, 2020
- MONEY LAUNDERING: EFCC prays court to relist ex-Gov Aliyu, others for trial - February 25, 2020
- China death toll from coronavirus outbreak rises to 2,663, officials confirm 77,658 infections - February 25, 2020