More details are still emerging on the reason why hostilities may reverberate in the currently stable oil rich Niger Delta as it is becoming clear that President Muhammadu Buhari may have been misled on award of OML to NPDC rather than Hi Rev Exploration and Production Company.
Otherwise, the termination of the construction of a modular refinery in Akwa Ibom state by Hi Rev Exploration and Production Company has become a fledging boil in buttocks of the drive to encourage massive establishment of modular refineries in the region.
Whereas some quarters are believing that the Nigerian National Petroleum Corporation (NNPC) is out to frustrate the building of modular refineries in the Niger Delta so as not to compete with the existing three refineries which are yet to hit anywhere closer to installed capacity, many experts see the advice of the Corporation to the presidency on the matter as counterproductive after all.
Trouble seems to have started vide a memo written by the Group Managing Director of the NNPC, Dr Maikanti Baru, dated 20th December 2016, was read, approved and signed personally by President Muhammadu Buhari same day.
Also, another letter conveying the President’s approval of the NNPC request was also written by the Chief of Staff to the President, Abba Kyari, who is a member of the NNPC Board on the same 20th December 2016. The letter is referenced: PRES/158/NNPC/38.
NNPC’s killer memo titled, ‘Restoration of OML 13 to NPDC’, said the revocation was sought because Hi Rev Exploration and Production Limited did not take up the Oil Prospecting Licence (OPL) 2003 which Department of Petroleum Resources (DPR) offered the company on June 16, 2015.
Baru had explained that the Nigerian Petroleum Development Company (NPDC), as the operator of the field named ‘Utapate oil field’ in 2007 was at the verge of re-entering the field when the lease was withdrawn and the OML 13 Lease was re-sized into three acreages of OPLs 2001, 2002 and 2003 resulting in Signatures bonuses of $46million, $66million and $34million respectively during the 2007 bid round and which reached final award in May 2015. The field was also converted from brown field to a Greenfield.
In the claims of NNPC boss, he argued before the presidency that “… that OML 13 which was inadvertently revoked and back-converted be restored 100% enbloc to NPDC; that NPDC bears the refund to the Offerees of OPLs 2001, 2002 and 2003 for the sums of $46million and $34million respectively which and thus absolves DPR of such refund obligation.” These were the prayers President approved same day this memo was written.
Nevertheless, letter of offer to Hi Rev dated June 16, 2015, DPR said: “ . . . the Minister has approved the offer to your company, Oil Prospecting Licence (OPL) number 2003, subject to your payment of the sum of $34 million as Signature Bonus.”
The investor’s letter of offer also made it clear that what was expected to be paid is 50% of the $34million which came to $17million payable within 90 days that fell within June 4th and September 4th 2015.
Accordingly, Hi Rev Oil averred that he acceptance of advanced payment made into a JP Morgan account domiciled in New York, United States by DPR already transferred the OPL 2002 to Hi Rev, which nullifies the non-payment claim by Dr Baru in his letter to President Buhari.
This developed encouraged the firm to seek legal interpretation to forestall losing the oil field by suing the Minister of Petroleum Resources and Attorney General of the Federation at the Abuja judicial division of the Federal High Court seeking an interlocutory injunction to prevent Federal Government agents from trespassing on the Utapate oil field OML 13 located at Iko community in Eastern Obolo Local Government Area of Akwa Ibom State pending the determination of the substantive suit.
Whereas judicial pronouncements on the matter is awaited, industry analysts say such back-and-forth policy inconsistency is enough to erode the confidence of private sector investors in the nation’s oil and gas sector which is in need of investments.
