Legacy Debts: FG Revokes Five Companies’ Oil Block Licences

Legacy Debts: FG Revokes Five Companies’ Oil Block Licences
Department of Petroleum Resources Building

The Federal Government has revoked the oil block licences of five companies, including a firm founded by late Chief Moshood Abiola.

The Department of Petroleum Resources, in a public notice on Thursday indicated that the licences were revoked as a result of legacy debts owed the federation by the affected firms.

According to the DPR, the government revoked five Oil Mining Leases and one Oil Prospecting Licence.

An OPL gives its holder the exclusive right to explore for and develop oil and gas within a defined area while an OML gives its holder the exclusive right to explore for, develop and produce oil and gas within a defined area.

“Notice is hereby given that in furtherance of the presidential directive on the recovery of legacy debts owed the Federation and in line with the provisions of the Petroleum Act Cap. P10LFN 2004, the under listed Oil Mining Leases and Oil Prospecting Licence have been revoked by the Federal Government of Nigeria for non-compliance with statutory regulatory obligations,” the DPR said.

The affected companies are Pan Ocean Oil Corporation (OML 98); Allied Energy Resources Nigeria, (OML 120 and 121); Express Petroleum and Gas Company (OML 108); Cavendish Petroleum Nigeria (OML 110) and Summit Oil International (OPL 206).

OML 108, being operated by Alhaji Aminu Dantata’s Express Petroleum & Gas Company Limited, expired in 2015, while OPL 206, owned by Summit Oil International, which was founded by Abiola, expired in 2014.

OML 110, operated by Cavendish Petroleum Nigeria Limited, which was founded by the late Alhaji Mai Deribe, expired in 2016.

Pan Ocean Oil Corporation has Dr Festus Fadeyi as its chairman, while Allied Energy Resources (now Allied Energy Plc) operates as a subsidiary of CAMAC Energy Holdings Limited, founded by Mr Kase Lawal.

In January this year, the Nigeria Extractive Industries Transparency Initiative named Pan Ocean, Allied Energy and Express Petroleum among oil companies that either defaulted in the payment of Petroleum Profit Tax, Education Tax, among others, to the Federal Government in 2016.

“The non-payment by these companies will result in revenue loss to the federation. It is worthy to note that Pan Ocean did not make any financial payments in 2016, despite being in JV arrangement with the federation,” NEITI stated in its report.

Earlier this year, the erstwhile Minister of State for Petroleum Resources, Dr Ibe Kachikwu, declared that the Federal Government had commenced a new automation process to aggressively recover royalties in the oil sector that were meant for the federation.

This, according to Kachikwu, helped the government to recover N1.2tn in royalty arrears from oil firms across the country.

The former minister also stated that companies that failed to make the required remittances at the stipulated dates might have their licences revoked.

NEITI had also called on the DPR to investigate the non-payment of royalties by these companies and ensure that the funds were recovered as appropriate.

In the report, which it released this year, NEITI further disclosed that Pan Ocean owed the Nigerian National Petroleum Corporation an outstanding debt of $135.8m since 1985.

It, therefore, called for an independent valuation of Pan Ocean’s indebtedness to determine the true fair value of interest thereon.

When contacted, Pan Ocean Oil Corporation Nigeria did not answer the several calls that were made by our correspondent.

It also did not reply a text message and an email that were sent to the firm to get its reaction on the revocation of its license.

However, on its website, Pan Ocean said the oil firm was incorporated in 1973, adding that since then, it had been operating as an exploration and production company in a Joint Venture with the Nigerian National Petroleum Corporation, on-shore the northern fringe of the Niger Delta.

Its OPL 71 was converted to OML 98 on December 1, 1975. The firm commenced crude oil production in August 1976 at the Ogharefe field of OML 98.

It stated that as a JV partner, the NNPC had 60 per cent working interest in OML 98 while Pan Ocean controlled 40 per cent.

Allied Energy too could not be reached, as the three phone numbers of the firm that were obtained in Abuja did not connect when our correspondent tried contacting the firm.

For Express Petroleum, the firm also could not be reached as of the time of filing this report.

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