NNPC takes over SPDC’s oil blocks

The Nigerian National Petroleum Corporation (NNPC) has taken over some of the oil blocks which the Shell Petroleum Development Company (SPDC) is divesting.

This was confirmed by NNPC spokesman, Levi Ajuonuma, who said that the corporation had come a long way and cannot play second fiddle to anybody as he re-affirmed that the action was supported by the law governing the operation of the partnership between the NNPC and its joint venture partners.

Ajuonuma said NNPC based its action on section 2.4.1 of the Joint Operating Agreement (JOA) which allows a senior partner to take over the operations of blocks which any of its joint venture partners decides to relinquish.

NNPC is the senior partner, with 55 per cent equity in this co-operation with Shell. The section further stated that when an operator ceases to be the operator of a block, it shall be removed by the non operators, if among other circumstances; the operator has signed or purported to have signed to relinquish the operatorship of the oil block, pursuant to clause 19.3 of the JOA agreement.
The operator’s power, responsibilities of supervision and management as operator, then cedes to NNPC. This implies that all those that have bided for the blocks have lost out. Shell put the four blocks on offer to indigenous oil firms, with the aim of expanding local capacity, it said.

NNPC had earlier warned investors to be careful in the operations of its blocks, while reiterating its right to determine who should operate of any of the oil blocks that Shell divested.
Shell was said to be on the brink of reaching agreement on the sale of its share before this action. The affected blocks are Oil Mining Lease (OML) 30, 34, 40 and 42.