Close button
The Guardian
Email YouTube Facebook Instagram Twitter WhatsApp
x

Consortium to optimise oil assets for improved revenue

Related

Oil workers on an oil rig. Source: Nairametrics

After several years of unearned revenue from undeveloped Oil Mining Leases (OMLs) 123, 124, 126 and 137, the Kaztec Engineering Limited and Salvic Petroleum Resources Consortium have promised to make the oil assets more valuable to Nigeria, if allowed to operate them.

They said the Department of Petroleum Resources (DPR), deserved commendation for doing due diligence and following relevant laws in making them the choice operators of the assets.

The OMLs, operated by Addax Petroleum under the Production Sharing Contract (PSC) arrangement with the Nigerian National Petroleum Corporation (NNPC), was revoked in March by the DPR due to non-development of the assets by Addax.

President Muhammadu Buhari overruled the DPR by cancelling the revocation of the assets and mandating the regulator to restore them to the NNPC, Addax’s contractual partner.

x

The consortium said in a statement: “We intend to maximise the potential of the assets to ensure that the government and people of Nigeria reap their full benefits against the backdrop of the on-going energy transition.

“In addition to optimising production, the consortium intends to deepen relationships with local communities, boost local content in all its ramifications and increase the employment and training of Nigerians, directly and indirectly.”

Praising DPR, the Kaztec/Salvic consortium said the consortium was chosen to manage the assets in accordance with the Nigerian Oil and Gas Industry Content Development (NOGICD) Act 2010.

“Under the Act, seasoned Nigerian independent operators such as Kaztec and Salvic are to be given first consideration in the award of oil blocks and oil field licences,” the companies said.

They said they were chosen for their familiarity with the assets, noting that DPR proactively took concrete steps to boost the revenue accruing to government from the underperforming assets.

Kaztec, with vast experience in offshore and onshore petroleum exploration and production, had collaborated with the previous operator on the assets for many years.

The consortium said the DPR also directed them to engage with Addax for an amicable resolution of all issues, including a commercial settlement if needed.

The companies were required to operate the OMLs under a PSC with NNPC; pay a Good and Valuable Consideration (GVC) of $340 million at the commencement of the PSC, and develop the significant oil resources that had been lying fallow to ramp up production, among others.

The consortium said there had been no new investments in the assets, resulting in a production decline to 25,000 BPD and a significant drop in revenue accruing to the Federal Government.

x


Receive News Alerts on Whatsapp: +2348136370421

No comments yet