Neconde clears air on five per cent equity in OML 42
•To increase production to 60,000bpd
Neconde Energy Limited, operator of oil mining lease, OML, 42, has denied promising five per cent equity to its host communities in Gbaramatu, Delta State.
Besides, the company said it plans to increase current oil production of between 15,000 and 17,000 barrels per day (bpd) from the block to 60,000bpd by the year end.
The communities had accused the management of Neconde Energy of reneging on an agreement to remit five per cent of its 45 per cent equity in OML 42 to them, adding that there has not been any community re-entry project since the recommencement of oil exploration activities in 2012.
According to the group, Neconde “refused to fulfil the five per cent equity share to the host communities, whose environment has been negatively impacted and devastated by oil activities, destroying our age-long traditional fishing business,” Momotimi Guwor, a spokesman for the communities, said in the statement.
But, the Managing Director of Neconde Energy, Frank Edozie, at a media parley in Lagos recently, said there was no agreement between the company and the communities to remit five per cent equity.
Edozie however promised that the company will definitely fulfil its corporate social responsibility in the areas of community development when it begins to experience stability in production and revenue generation.
According to Edozie, Neconde has the interest of the people at heart, and had taken some strategic steps such as the rehabilitation of the Batan and Odidi flow stations to enable it achieve improved output.
He said: “Neconde EL prides itself in local talent development and does not in any way ignore the services of local talent, especially in the host communities of its operations. Therefore, this allegation is false and negated by verifiable employment records in our organisation.
“The allegation bordering on hijacking contracts from local contractors is untrue. Local contractors have been providing and continue to provide many services that are key to the operations of the NEL and its Joint Venture (JV) partner NPDC. However, it is common knowledge that operations have been epileptic due to frequent and sometimes prolonged outages of both the Trans-Forcados Pipeline and the Forcados Export Terminal.
“These frequent outages have made it difficult for the JV to effectively manage some of the contracts it employs in its operation. One of such contracts is the Operate and Maintain (O&M) contract through which the JV manages its field activities. To reduce significant losses to the JV due to wasteful contractual exposures, a decision was made by the JV to manage these O&M activities directly using JV personnel. Consequently, O&M contracts which expired at the end of 2016 were not renewed.
”The most absurd of the allegations by the Gbaramatu Traditional Council is the claim that the Management of Neconde Energy Limited refused to honour an agreement to remit five per cent of its 45 per cent equity to OML 42 host communities. It is a matter of public record that NEL acquired its equity in OML 42 following the divestment of same by Shell Petroleum Development (SPDC). NEL is unaware of and did not enter into any agreement with any party or parties to sell or otherwise transfer any of its equity, for any consideration whatsoever, to any party or parties. Obviously, Neconde Energy Limited cannot honour, nor should be expected to honour, an agreement that it is not privy to.”