NNPC sacks Eroton as operator of oilfield, OML 18

The Nigerian National Petroleum Company (NNPC) Limited has taken over the oil mining lease (OML) 18 from the previous operator, Eroton Exploration and Production Limited.

NNPC Eighteen Operating Limited, a subsidiary of NNPC Limited, is now the new operator of OML 18 according to the NNPC spokesperson, Garba Muhammad, in a statement on Monday.

Prior to the takeover, both Eroton and NNPC owned stakes in OML 18 as a joint venture, with Eroton operating the oilfield. However, in the last two years, the oilfield has not been producing.

A week ago, Eroton said it was not to blame for production failing, stating that it was primarily due to the unavailability of Nembe Creek Trunk Line.

Eroton had alleged that unknown armed men allegedly acting on behalf of Sahara, another oil firm, had gained access to its property, displacing some of its staff.

However, Eroton said it was still the operator of OML 18, denying reports that the NNPC had taken over the asset, arguing that there’s a contractual obligation to conduct a takeover, and that process hasn’t been adhered to.

But on Monday, Muhammad said that the OML 18 was now fully under the control of the NNPC to resume production of oil and gas, as well as prevent further degradation of the oilfield.

NNPC said, “In order to protect the joint venture (JV) investment in OML 18, the non-operating partners, NNPC Limited (55 percent interest) and OML 18 Energy Limited (“OML 18 Energy” – 16.20 percent interest), jointly owning 71.20 percent equity, removed Eroton as operator of the JV in line with the provisions of the joint operating agreement (JOA). NNPC Limited and OML 18 Energy further appointed NNPC Eighteen Operating Limited as operator of the JV,” the statement reads.

READ ALSO:NNPC signs MoU to start crude oil exploration in Gambia

“The change in operatorship has been notified to the Nigerian Upstream Regulatory Commission (NUPRC) and communicated to Eroton. While the key business reasons that made the change in operatorship are compelling, it is publicly available information that production has declined from thirty thousand barrels per day (30,000 bpd) to zero.”

NNPC also said due to non-payment of outstanding taxes, the Federal Inland Revenue Service (FIRS) closed the head office of Eroton.

It was gathered that the office has been on lock for more than 12 months amid Eroton’s failure to meet its fiscal obligations to the federal government.

Part of the statement reads, “NNPC Limited in particular, as majority shareholder with a unique stewardship responsibility to the federation, is committed to assuring the energy and financial security of the country is uppermost in its business decisions.”

It also said, “Removing an operator in these circumstances is therefore inevitable in order to protect the JV from governmental or third parties action from entities, including Eroton’s lenders and other service providers.”

Meanwhile, the Economic and Financial Crimes Commission (EFCC) is reportedly investigating Eroton’s activities as it relates to the oilfield.

Join the conversation

Opinions

Support Ripples Nigeria, hold up solutions journalism

Balanced, fearless journalism driven by data comes at huge financial costs.

As a media platform, we hold leadership accountable and will not trade the right to press freedom and free speech for a piece of cake.

If you like what we do, and are ready to uphold solutions journalism, kindly donate to the Ripples Nigeria cause.

Your support would help to ensure that citizens and institutions continue to have free access to credible and reliable information for societal development.

Donate Now