STRONG indications emerged that the oil and gas industry in Nigeria may nose dive as Eland Oil and Gas Nigeria Limited is at loggerheads with the Department of Petroleum Resources, DPR and operator of the Opuama Field at OML 17 on regulatory matters concerning crude export from the asset.
In a statement by the spokesperson of Oil For Nigerians, a Non-Governmental Organization, Mr. Solomon Wendy, disclosed that a source from the DPR had revealed that major players in the oil and gas sector are worried over the trend since it would be the second time in less than a year that companies associated with the United Kingdom stock exchange will embark on an unconventional route to blackmail the Muhammadu Buhari-led administration over the insistence of the regulators in following laid down procedures and regulations.
The statement read: “The operator of the field, the operating arm of the NNPC is carefully studying the matter and may decide to enforce their operatorship of the field which is currently being managed by both companies.”
Mr. Solomon Wendy claimed that the DPR source disclosed that “Eland Oil and Gas needs to know that the era of the erstwhile MD Yusuf Matashi has gone and that the new hands at the helm of affairs will not allow any foreign company to push him around.
He added that the Minister of Petroleum, President Buhari is also a no-nonsense man and will frown at the Dublin-based company’s effort to smear his incorruptible personae.”
The spokesperson also noted that E and P legal and professionals conversant with the unfolding story believes that there has to be more than meet the eyes in the disharmony since “the issue at hand between Eland and the DPR is mainly procedural and should not have led to consideration of legal action as perceived.
Besides, he alleged that there is the possibility of Eland to have pledged some reserves that belong to NPDC in its attempt to secure the $50million facility with a South African bank.”
Wendy stressed that any accordion facility is essentially an incremental facility which allows a borrower to take an additional facility over and above what was originally agreed on with the financier on the same terms as the original facility for expansion purposes.
Also, he revealed that there had been indications that the financial adviser had realized that the expectation to commence principal repayment on its existing five year reserve based landing facility which was said to have occurred in 2018.
He, however, noted that inside sources expressed fears that the company may be cash-strapped since the November 2018 loan has not been deployed, mainly owing to the many rig mechanical failures with the Gbetiokun Drilling campaign, the poor production from its new wells and the increasing water having challenges from the field.
Wendy said: “Don’t you see that the company has been using the loans to continuously buy back its shares to shore up the shareholders’ values at the expense of NPDC and the Government.”
Other worries , according to him, is the perceived erratic behavior of the Les Blair-led company, which makes the stakeholders believe that the company may be facing an existential crisis due to Standard Bank’s insistence that Eland oil and Gas meets all conditions precedent to the draw-down of the loan.
The spokesman alleged that the development must be responsible for the desperation of the company to claim operators’ reserves with its own increase assets to the facilities.