Explorations activities resume on OML13 after 27 years, as Governor Udom gives assurance

Solomon Ezeme

Oil exploration activity is expected to resume 27 years later at the controversial OML (Oil Mining Lease) 13 located in Akwa Ibom State, SouthSouth, Nigeria after operations ceased at its main field Utapate in 1995.

In 2016, there was a revocation of the licence from Shell Petroleum Development Company (SPDC) by the Nigerian National Petroleum Corporation and was awarded to the  Nigerian Petroleum Development Company (NPDC), the exploration and production arm of NNPC,by the NNPC through executive fiat and without going through the Licencing Bids Rounds. This action thereby sparked a long-standing face-off that delayed resumption of works on the site.

OML 13 after a long legal battle between NNPC and SPDC is now 100 per cent owned by the NPDC. It is at advanced stages of completion, with a flotation station, storage station and other facilities built in 7 months.

The project is currently being undertaken by Sterling Oil Exploration and Energy Production Company Limited (SEEPCO) Sterling Oil in conjunction with the NPDC, Natural Oil Services Limited, NOSL and other partners, following $3.15 billion ceiling funding  Financing and Technical Services Agreement provided by SEEPCO for period of 15 years with a 10-year capital investment period and five years for cost recovery.

EnergyDay gathered that the deal is expected to boost the nation’s crude oil reserves and daily oil production to about 3 million barrels per day, with a projected income of over $10.2 billion in royalties and taxes for the Federal Government over the next 15 years, and over $5 billion for the NNPC  after payment of the entire financing obligation.

The OML 13 has over 900 million barrels of oil and 5.24 tcf of oil and gas reserves, according to Mallam Mele Kyari, NNPC’s Group Managing Director. The oil block hosts many oilfields, including the Utapate South,  Ibibio fields, and was projected to produce about 7,900 bpd (barrels per day) of oil.

It has been dormant since its main field Utapate ceased in 1995. The OML 13 was revoked from Shell in 2016 by NNPC.

Its tussle with the NNPC ensued thereafter when Shell accused the national oil Company of re-awarding the revoked licence by executive fiat to  Nigerian Petroleum Development Company (NPDC), its subsidiary, without statutory licensing round bids.

The Senate Committee on Ethics, Privileges and Public Petitions, in 2017, questioned Maikanti Baru, the then Group Managing Director (GMD) of the NNPC and Management of Shell Petroleum Development Company (SPDC), over the revocation and re-award of Oil Mining Licence (OML) 13 without following due process. The probe came after Mr. Longers Anyanwu, National Coordinator, Global Peace and Sustainability Network, wrote to the Senate to look into the matter.

The revocation and re-award by the national oil Company were perceived to be unfair and lacking transparency, ignoring extant laws, regulations and guidelines established for operations in the oil and gas industry.

On Saturday, Governor Udom Emmanuel went round the oil block to inspect the progress made in readiness for the resumption of oil and gas exploration activities on the abandoned site in Atabrikang, Eastern Obolo Local Government Area of Akwa Ibom State.

He confirmed that progress is being made as the block, which would be accommodating over 5,500 workers, will have operations commence in it by the end of 2022.

The Governor assured his people that new development should not be mistaken for mere political bate to win votes in the coming elections but a project that will eventually come on stream by the end of the year.

Governor Udom said, “I have assessed the level of work done. Most times when we make statements because people are so used to political statements, they probably think that we are just talking about politics.

“I believe that today Eastern Obolo has seen tremendous progress,” he said.

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