By Michael Eboh
This was coming almost one year after Pan Ocean Oil Corporation’s ownership of the asset, along with the assets of five other companies, were revoked. Pan Ocean, over the years, had made significant investment in the assets, especially with a major pipeline project among others.
The asset, with 2P crude oil reserve of 43 million barrels and 383 billion Standard Cubic Feet, SCF, of gas, was awarded to Pan Ocean in 1973, with the company commencing production in 1973.
However, the company’s licence to OML 98 was revoked in 2019, for failing to meet up with its financial obligations to the Federal Government.
Speaking at the handover ceremony of OML 98 taken over from Pan Ocean to the NNPC/NPDC, Director of the DPR, Engr. Sarki Auwalu, disclosed that the transfer of the asset was to ensure that Nigerians get best returns from the oil and gas asset.
He noted that the Federal Government had earlier revoked the licence of Pan Ocean following the inability of the company to meet up with its financial obligations to the government and people of Nigeria.
Auwalu added that with the revocation and hand over, all stakeholders would undertake a thorough review of the asset to ensure that Pan Ocean and its partner, NNPC, recoup all their investments in the assets over the years, noting that the economic interests of the stakeholders are protected, while the best interest of employers of Pan Ocean are guaranteed.
He said, “OML 98 is an asset that is prolific. The 2P reserve is about 43 million barrels with 20 million barrels of condensates, with over 383 billion SCF of gas. This asset is supposed to work. There is an obligation for each and every company that they need to pay to government; and the first line charge is royalty. If a company is not paying royalty, it means the company is not performing.
“So government invoked its own right to revoke the asset and give it to somebody that would pay that royalty to the Nigerian people; because royalty is what Nigerians really take out of the business. All the investors they would come, we would give them opportunities by giving them the assets; they would put in their money and they would give certain royalties, concession rentals and other revenue to government.
“That is really what government takes from the asset, the resource; whether it is oil, condensates or gas. The reason for the revocation is failure to meet obligations of that asset to government.”
He explained that similar fate awaits the five other assets whose licence was revoked last year, adding that the decision of the government to hand over the asset to the NPDC was in line with the policy of government that Nigerians take charge and take full charge of the country’s resources.
Also speaking, Managing Director of the NPDC, Mr. Mansur Sambo, who was represented by General Manager, Exploration and Development Division of the NPDC, Mr. Ferdinand Bariwei, stated that with the hand over, the company would look at the fields and the whole asset technically and professionally and take critical decisions to boost its production.
He said, “I strongly believe that we are doing more studies in the field already, seismic activities are being carried, and being processed. We look at the wells, the ones that are producing and the ones that have been shut-in, so that we see quick wins from the fields and start producing as soon as possible to meet the expectations of our stakeholders.
“I know the capability that NPDC has and I assure you and the government and everybody that NPDC is capable of operating that field.”
Also speaking, Managing Director of Pan Ocean, Mr. Festus Fadeyi, stated that PanOcean would cooperate with the NPDC and all relevant stakeholders to ensure that the directive is carried out for the benefit of all Nigerians.”