As part of plans to boast the nation's revenue base, President Muhammadu Buhari on 13th March 2019 ordered the Nigerian National Petroleum Corporation to take over the operatorship of the entire Oil Mining Lease (OML) 11 from Shell Petroleum Development Company.
In a correspondence from the Presidency to the Group Managing Director of NNPC, dated March 1, 2019, with reference number SH/COS/24/A/8540 and signed by the Chief of Staff to the President, Abba Kyari, the President’s directive was clearly stated that the entire operatorship of OML 11 should be taken over by the NNPC/Nigeria Petroleum Development Company not later than April 30, 2019.
NPDC is the flagship oil exploration and production subsidiary of the NNPC and the liaison office of the company acknowledged receipt of the letter on March 5, 2019.
The letter from the Presidency to the NNPC, which had its title as, ‘Operatorship of Entire Oil Mining Lease 11,’ read in part, “Kindly note that the President has directed NNPC/NPDC to take over the operatorship, from Shell Petroleum Development Company, of the entire OML 11 not later than 30 April 2019, and ensure smooth re-entry given the delicate situation in Ogoniland.”
It added that the President has “directed NNPC/NPDC to confirm by 2 May 2019, of the assumption of the operatorship.” OML 11 lies in the southeastern Niger Delta and contains 33 oil and gas fields of which eight are producing as per 2017. In terms of production, it is one of the most important blocks in Nigeria.
Industry players further explained that whoever operated an OML on behalf of partners would bring in its expertise and that the NPDC had such capacity right now. They noted that what was transferred to NNPC, based on Buhari’s order, were basically the operatorship of the OML and not the shares of the partners in the joint venture.
Our correspondent further gathered that Shell had not produced a drop of crude oil from Ogoniland for about five years and that partners were not earning revenue as a result of this.
“So if another partner is willing to run the asset, I think he should be allowed to try. Four persons own an asset and it is being run by owner number one and owner number one is not able to run the asset for several years, you can try owner number two. That’s what is happening,” another source said.