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Business News of Friday, 14 February 2020

Source: MyNigeria

FG transfers Pan Ocean oil assets to NPDC

The ownership of Oil Mining Lease, OML, 98 as well as other assets have been transferred from an oil and gas firm, Ocean Oil Corporation to the Nigerian Petroleum Development Company, the upstream subsidiary of the Nigerian National Petroleum Corporation, NNPC.

Pan Ocean Oil's corporation is not the only one whose asset was revoked. Its asset was revoked alongside the assets of five other companies after it had made significant investment in the assets, with a groundbreaking pipeline project among others.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 given to Pan Ocean Oil in 1973.

Giving reasons why OML98 was revoked in 2019, Director of the DPR, Engr. Sarki Auwalu said it was due to the failure of the company to meet up with its financial obligations to the government and people of Nigeria.

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 the 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 the government," Auwalu said.

Following the decision to divest the oil well to NPDC, Managing Director of the NPDC, Mr. Mansur Sambo said the company would look at the fields and the whole asset technically and professionally and take critical decisions to boost its production.

Reacting to the development, Managing Director of Pan Ocean, Mr. Festus Fadeyi, promised to cooperate with the NPDC to ensure the exercise is beneficial.

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