14 March 2019

Nigeria: Govt Takes Over Shell's OML 11

Photo: Pixabay
(file photo).

Lagos — The federal government has directed that the licence for the operatorship of assets of Oil Mining Lease 11 in Ogoni land granted Shell Petroleum Development Company, SPDC, be revoked and transferred to the Nigerian National Petroleum Corporation, NNPC and its upstream subsidiary, the Nigerian Petroleum Development Company, NPDC.

OML 11 lies in the southeastern Niger Delta and contains 33 oil and gas fields of which eight are producing as per 2017.

In a letter dated, March 1, 2019, with Reference Number: SH/COS/A/8540, signed by Chief of Staff to President Muhammadu Buhari, Mr. Abba Kyari, the Presidency directed the NNPC and its upstream subsidiary, the Nigerian Petroleum Development Company NPDC to take over the operatorship of the entire asset.

According to a memo titled "Operatorship of Entire Oil Mining Lease (OML) 11" signed by the Chief of Staff to the President, Abba Kyari, dated 1st March 2019 and addressed to the Group Managing Director (GMD), NNPC, Dr. Maikanti Baru, the President directed "NNPC/NPDC to take over the operatorship from Shell Petroleum Development Company (SPDC) of the entire OML 11 not later than April 30th 2019 and ensure smooth re-entry given the delicate situation in Ogoniland."

It also directed NNPC/NPDC to confirm by 2nd May 2019 of the assumption of the operatorship.

The federal government recently denied SPDC renewal of OML 11, but decided to split it into three because "it is too large (2,800spkm)."

Shell has 45 per cent stake in OML 11 while the Federal Government through the NNPC has 55 per cent but Shell has been the operator of OML 11 but has not been operating the oil fields due to its role in Ogoniland crisis.

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