Categories: Business

Nigeria: NNPC Upbeat as it Regains Ogoni OML 11 from Shell in Court

The Nigeria National Petroleum Corporation (NNPC) has hailed the recent Appeal Court judgment affirming its ownership of the Oil Mining License 11 (OML 11), describing it as a huge victory for Nigeria and the beginning of moves to address decades of restiveness in the host community.

OML 11 is in Ogoniland, Rivers State, South-eastern Niger Delta and contains 33 oil and gas fields.

The Appeal Court sitting in Abuja had on Monday upturned the August 23, 2019 ruling of the Federal High Court, Abuja which held that the Shell Petroleum Development Company (SPDC) was entitled to the renewal of the lease on OML 11.

In the ruling, the Appellate Court held that the minister of petroleum resources “has the discretion whether or not to renew the OML 11 Lease in favour of SPDC.”

The Court further held that the Minister rightly exercised his discretion in awarding the OML 11 Lease to NPDC, a subsidiary of the Nigeria National Petroleum Corporation (NNPC).

A statement yesterday by the Group General Manager, Group Public Affairs Division of the NNPC, Garba Deen Muhammad, quoted the NNPC Group Managing Director, Mallam Mele Kyari, as saying “the ruling has paved the way for the NPDC to lead a formidable OML 11 team towards bolstering productivity in a responsible, efficient, environmentally friendly, and sustainable manner.”

Kyari adds: “Accordingly, resumption of operations on OML 11 will demonstrate the NPDC’s full commitment to develop and add value to its communities and the nation as a whole.

“We now have an opportunity to reconstruct a new beginning on OML 11, driven by global best practices and a social contract that would put the people and environment of the Niger Delta above pecuniary considerations.

“This is a huge victory for the government and people of Nigeria as we now have the impetus to responsibly unlock the oil and gas reserves the block offers for the benefit of all Nigerians.”

The statement further explained that efforts by the NPDC to take over the assets and operations were in full gear, adding that the company “is working closely with all stakeholders and partners to achieve the new vision of responsible, smart engineering and environmental sustainability that the federal government has endorsed for OML 11.”

The NNPC GMD stated that the NPDC “will pursue promotion of clean energy via its gas production with prospects of gas-to-power initiatives to light up opportunities in the region,” and provide the much deserved industrialization.

The statement noted that the environment would be a top priority for NPDC’s operations, as well as implementation of a robust host community engagement strategy to address subsisting issues, while agreeing to a transparent engagement model going forward.

The NNPC cautioned against any further legal challenge by the SPDC, stressing that it was about time Nigeria derived the benefit of the OML11 after over three decades.

“It is time to roll back the decades of despair and destruction with the emphatic Appeal Court ruling. It is time to unlock opportunities for economic development in the region.

“In the light of their inability to work on the Ogoni region of the block for over 30 years and the new beginning this judgement presents, further legal action by Shell will not only be futile, it would be depriving Nigeria of an opportunity to make meaningful gains from OML 11 when the nation needs all the revenue it can get to move Nigeria forward,” the GMD said.

The NNPC, the NPDC is now set to begin oil production activities at OML 11, after years of dispute over the asset.

Though, a Joint Venture (JV), Shell had not produced a drop of crude oil from Ogoniland for several years and that partners were not earning revenue as a result of the development.

In 2019, President Muhammadu Buhari ordered the NNPC, through the NPDC to take over the operatorship of the asset from SPDC.

At the time, a letter signed by the late Chief of Staff to the President, Abba Kyari, urged the national oil company to take charge not later than April 30, 2019 “and ensure smooth re-entry given the delicate situation in Ogoniland.”

OML 11 remains one of the most important oil blocks in Nigeria. Located in a swampy terrain, it has Port Harcourt in the northwest of the block, while the major yard and logistics base at Onne is sited by the Bonny River.

While the NNPC will take over the operatorship of the facility, it was however learnt that it will not affect the joint ownership arrangement of the block by four partners.

Emmanuel Addeh in Abuja and Peter Uzoho in Lagos