The Department of Petroleum Resources (DPR) has officially handed over the Oil Mining Licence (OML) 98 to the Nigerian Petroleum Development Company, a subsidiary of the Nigerian National Petroleum Corporation (NNPC).
Speaking at the hand-over in Abuja, Mr Sarki Auwalu, DRP Director and Chief Executive Officer, said that the licence was revoked from its operators, Pan Ocean oil corporation over non remittance of royalties.
OML 98 is the only asset belonging to a Joint Venture (JV) between NNPC and Pan Ocean Oil. OML 98 is located in the onshore Niger Delta.
The acreage was originally awarded to Pan Ocean in 1971 as OPL 71 and was converted into OML 98 in 1975. In addition, Production from the JV started in 1976.
OML 98 is an asset that is prolific.
The 2P reserve is about 43 million barrels with 20 million barrels of condensates, and over 383 billion SCF of gas.
These assets are supposed to work.
“There is an obligation for each and every company to pay the government; and the first line charge is royalty. If a company is not paying royalty, it means the company is not performing.
“So government invokes its own right to revoke the asset and gives it to somebody that would pay that royalty to the Nigerian people; because royalty is what Nigerians really take out of the business.
“We need investors to show interest, while, we would give them opportunities by providing the assets; they would invest 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 failure to meet obligations of that asset to government,’’ he said.
He said that five other licences that were revoked alongside OML 98 were revoked for the same reason adding that government was looking for the best people to transfer the assets to for maximum utilisation and benefits.
“Why, because, we want the assets to work and we want Nigerian people to benefit from the resources they are blessed with ,so, the fate of the others will be similar to this and government is looking at the best way to operate the assets for Nigerians to benefits.’’ he added
He said that NPDC got the asset for its proven confidence in operations over the years.
“This is a company that 15 years ago could not show to drill up to 10,000 barrels but now, our NPDC can produced over 150 million barrel per day. This is our own made in Nigeria, by Nigeria and for Nigeria,’’ he said.
“It shows that Nigeria has come of age. We have a company of our own, 100 per cent Nigerian and operated by Nigerians.
He noted that the handing over of the assets to NPDC means that Nigeria oil and gas sector had grown, adding that, the idea was to ensure that Nigeria takes charge of its resources.
Auwalu urged the company to be responsible and ensure that it operated with ultimate transparency and develop the asset for the benefit of Nigerians.
Conclusively, he noted that government would not spare anybody found wanting.