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Fresh controversy brews over OML 40, 42

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diezani-allison-maduekeThe Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN), and the Nigeria Union of Petroleum and Natural Gas Workers (NUPENG), of the Nigeria Petroleum Development Corporation, (NPDC), Benin, Edo State branch, have disrupted activities in the company due ownership issue of the Joint Venture, JV, partnership in Oil Mining Leases OML 40 and OML 42.

The unions had accused the Minister of Petroleum Resources, Mrs. Diezani Allison-Madueke, of stripping the two oil blocks from NPDC, a subsidiary of Nigerian National Petroleum Corporation, (NNPC).

In 2011, the Federal Government assigned 55 per cent equity in eight assets divested by the Shell Petroleum Development Company, SPDC to NPDC. The company had since retained the operatorship of most of the assets which included: OMLs 4, 26, 30, 34, 38, 40, 41 and 42.

However, over the past one year, NPDC and Neconde Energy, joint owners of 55 percent and 45 percent stakes respectively, have been engaged in unresolved crisis over the operation of the OML 42, despite the dispute.

The union are now calling for the reversal of the award of the right back to NPDC. They claimed that the NPDC, contrary to reports, have the capacity and competence to operate the said field.

The union workers are angry that they were not carried along by management in the entire process, and are also of the misconception that management’s decision would not only threaten their jobs, but will jeopardize the future of the industry.

Over the years, NPDC have been under constant attack for lacking the requisite technical competence and financial muscle to operate the assets in contention effectively and efficiently.

Under NPDC’s operatorship, all the oil fields have taken a nose-dive in production volumes; obligations to communities have not been met; sharp drop in revenue, among others.

All the indigenous companies that are in a JV with NPDC have suffered from the poor performance of NPDC since acquiring the licenses.

They all have lamented NPDC’s lack of capacity to continue as the operator of the acreages they purchased from the Shell-led consortium. Their argument is that they could have gotten more production out of the fields than NPDC was doing as operator.

The government appears to have finally agreed with them and the perception in the industry is that the remaining three companies will soon have their prayers for operatorship answered.

A management staff of NPDC who pleaded anonymity, explained that the strike had resulted from “a breakdown in communication” between the management of the company and the union members. He further stated that under the new arrangement, the workers stand to benefit more.

He stated that both the NPDC and the indigenous companies are all understaffed, and would require more workers.

He further stated that, with operatorship rights transferred to the indigenous companies, their is bound to be a sharp increase in oil production; an increase in revenue stream; increased gas supply to domestic markets to improve power generation; community development, among others.

The Neconde Chairman, Dr. Ernest Obiejesi, had alleged that NPDC lacked the capacity to continue as operator of the oil block following the decline in production level from 30,000 barrels per day, bpd, achieved as at the period of acquisition from SPDC, the previous operator of the onshore block to 13,000 bpd in 2014.


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1 Comment
  • Ogbologbo

    These NPDC workers are really funny. Do these OMLs belong to the unions. The owners of the assets have a right to do what they like with them. This was only a transfer of operatorship and they are complaining. Shell sold its interests in these assets, retrenched staff and heavens did not fall. What rights do these unions claim to have. When operatorship was given to NPDC where they consulted. The Petroleum minister should ignore them and if they are still on strike when the new Govt. is sworn in they should sack the lazy idiots. What arrant nonsense.