The Honourable Minister of Petroleum Resources, Deziani Alison-Maduekwe, has granted consent assigning 45 per cent of participating interest of SPDC, TEPNG and NAOC in OML-40 to Elcrest Exploration and Production Limited. Elcrest, a joint venture vehicle owned by Starcrest Energy, a subsidiary of the Chrome Group headed by Sir Emeka Offor and Eland Oil & Gas had, on 24th of May, 2011 applied for consent from the Honourable Minister of Petroleum resources for 45 per cent of participating interest in OML-40.
Of the five licenses divested by shell in 2011, two were completed on November 30 being FHN/Afren on OML-26 and the Kulcyk led Neconde consortium on OML-42. OML-34 and OML-30 are still to receive ministerial approval to conclude. The long delay in granting consent by the Honourable Minister of Petroleum Resources was caused by the problem with operatorship.
NNPC had said that it would not transfer its rights to operate the oil blocks, claiming that the governing agreements gave NNPC the rights to reclaim operatorship if Shell sold its interest (Shell was operator). As a result NNPC was not going to grant consent to transfer operatorship rights to the buyers of the Shell interest.
However, a compromise has eventually been reached. Apparently, a third party contractor of NNPC will be the nominal operator and the buyers of the Shell interest will be appointed the operator’s ‘technical partner.’ The Honourable Minister of Petroleum Resources has finally granted consent to the sale, and the buyers are ready to proceed.
OML-40 has proven and probable reserves (2P) of 225.7 million barrels of oil equivalent and historically produced at less than 5,000 barrels per day before it was capped. It however, has the potential to produce 10,000 barrels per day, after the revamp of a pipeline vandalized by militants a few years ago.
