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OML 11: Pitfalls for President’s Ogoni Re-entry Order

President Muhammadu Buhari has ordered full takeover of OML 11 operatorship from Shell – exactly 25 years after the company exited crude oil production in Ogoni land. The hurdles ahead of this move is examined

A few days before President Muhammadu Buhari ordered the re-entry into Ogoniland by Nigerian National Petroleum Corporation (NNPC) for oil production, royal fathers in Ogoniland had endorsed an indigenous oil firm, RoboMicheal Limited, to commence operation in the Ogoni oilfield.

The Supreme Council of Ogoni Traditional Rulers and the Conference of Ogoni Traditional Rulers, which jointly gave the endorsement as its resolution reached at the end of a meeting of the 27 royal fathers, did not factor in joint ownership structure of the oil fields between NNPC and Shell Petroleum Development Company (SPDC). This structure had earlier conferred SPDC with operatorship of the field.

Shell had exited operations in Ogoniland 25 years ago and the President order, which became public last week, was for NNPC to fully takeover the operatorship of Oil Mining Lease (OML) 11 from the oil multinational.

OML 11, which lies in the southeastern Niger Delta and contains 33 oil and gas fields, is one of the most important blocks in Nigeria in terms of production.

The Order by Mr. President

The president, who gave the order in a restricted memo to the Group Managing Director of NNPC, gave the Corporation a May 2 deadline to confirm the execution of the takeover order.

The memo dated March 1, 2019 with reference number SH/COS/24.A/8540, obtained by New Telegraph last Wednesday, was signed by Chief of Staff of the President, Abba Kyari.

“Kindly, note that the president has (a) Directed NNPC/NPDC to takeover the operatorship from Shell Petroleum Development Company (SPDC) of the entire OML 11 not later that 30 April, 2019 and ensure smooth re-entry given the delicate situation in Ogoniland,” the memo stated.

“(b) Directed NNPC/NPDC to confirm by 2 May, 2019 of the assumption of the operatorship.”

Maikanti Baru, GMD of NNPC

NNPC begins action?

Titled: “Operatorship of Entire Oil Mining Lease (OML) 11,” the memo was internally shared among the Chief Financial Officer (CFO), Chief Operating Officer (COO), Group Executive Directors (GEDs) and Group General Managers with the NNPC headquarters.

It was received by the GMD through his office on March 4, 2019 and he directed the memo to be discussed on crucial meeting of top management staff last Wednesday.

A stamp of the NPDC on the memo, New Telegraph also gathered, showed that the document was also received by the NPDC Liason office on March 5, 2019.

Impending faceoff

Though Shell, which hitherto operated the OML11 before its exit 25 years ago is yet to comment on the matter, the takeover order is, however, against the earlier stand by royal fathers in Ogoniland who had made a U-turn to endorse an indigenous oil firm, RoboMicheal Limited to commence operation in the Ogoni oilfield.

The Supreme Council of Ogoni Traditional Rulers and the Conference of Ogoni Traditional Rulers jointly gave the endorsement as its resolution reached at the end of a meeting of the 27 members of the Council held in the Palace of its Chairman, HRH, King Godwin Giniwa in Korokoro, Tai Local Government Area of Rivers State.

The 27 members of the Ogoni Traditional Council, which represents the 27 monarchs in the kingdom and communities of Ogoni, said the endorsement of RoboMicheal Limited was imperative as the company has been engaging with the people and already had obtained the operatorship license for OML11 from the Federal Government.

Spokesperson of the Supreme Council of Ogoni Traditional Rulers and Paramount Ruler of Kpite Community, HRH King Samuel Nnee, who read the communiqué to newsmen at the end of the meeting, explained that RoboMicheal was committed to the development of Ogoniland.

Clean up as pitfall

The $1 billion Ogoni clean up, which penultimate weekend faced fresh threat, is a major impediment to full execution of the president’s order.

The delay by Port Harcourt refinery, a subsidiary of NNPC, to remit its $23 million share into the clean up process, has lingered and this is seen as a major challenge for the funding and operatorship of OML 11 when it is finally taken over by NNPC.

The fee by Port Harcourt refinery was expected to be remitted to the London’s Standard Chartered Bank, the banker for the cleanup.

Civil Society Legislative Advocacy Centre (CISLAC), which said this, noted that Shell and other stakeholders had already lodged their shares $177 million into the account since 2018.

Programme Director, CISLAC, Kola Banwo told this newspaper on the sideline of a workshop in Lagos, that the biggest victim or casualty in the delay of the cleanup is the environment.

Nothing that all the stakeholders were expected to have contributed a total of $200 million, being the first tranche of payment towards the clean up, Banwo maintained that as at two weeks ago, the Port Harcourt Refinery – a subsidiary of NNPC – is yet to make payment of its $23 million.

In all these, the people continue to suffer because the environment’s suffering is unabated. The live expectancy in the region is 40 years and this is 11 years far below the live expectancy in other parts of the country.

Stating that the people suffer by giving birth to children with deformed body parts, Banwo noted that there must be health audit in the Niger Delta for everyone to know the extent of damage the continued delay in the cleanup is causing Ogoni land and the entire region.

Minister of State of Environment, Ibrahim Jibril, had earlier confirmed that the PH refinery had been delaying payment of its share, though he expressed optimism that the clean would start soon.

Jubril said on October 8, 2018 while playing host to the British Deputy High Commissioner to Nigeria, Laure Beaufils in Abuja; “As I’m talking today, that (Ogoni cleanup) account has been credited with the sum of $177 million. This is what is supposed to be given by the oil majors who are there and to pay for the cleaning and restoration of those degraded lands.”

Jibril said an initial bill of $1billion was recommended to be used over a period of five years, adding: “With the $177m for 2018, the balance is expected to come from the refineries and we have written to inform the president; he (president) has given the directives that the petroleum ministry should handle that issue.”

Over five months after the president’s directive, the PH refinery, Banwo said, is yet to pay its share into the account.

“We make enquiries about this but we were told that up till today, the refinery in Port Harcourt has not paid. The excuse they gave was that the delay was caused by bureaucracy.

“The truth, however, is that bureaucracy or no bureaucracy, the delay in payment is seriously affecting the entire cleanup process,” he said.

Last line

The president has the power, no doubt, to give operatorship of any oil field to NNPC/NPDC, it will not be a bad idea if he considers consultation with stakeholders in Ogoniland over the OML11 takeover order.

This becomes necessary based on the controversial history of oil production, pollution and confrontations in Ogoniland.

Royal fathers in Ogoniland should also give prominence to technical competence ahead of emotion over who operates oil fields in their domain. The land has suffered enough degradation and pollution for this not to be considered.