Group Managing Director of NNPC, Dr. Joseph Thlama Dawha

By Ejiofor Alike


The Nigerian National Petroleum Corporation (NNPC), Shell Petroleum Development Company (SPDC) and a local oil and gas firm, Aiteo Eastern Exploration and Production Company Limited, have concluded the transaction involving the acquisition of SPDC’s 30 per cent stake in Oil Mining Lease (OML) 29 and the Nembe Creek Trunkline (NCTL) by the indigenous firm under the latest divestment programme of the oil giant.

Total E&P Nigeria Limited and Nigerian Agip Oil Company Limited have also assigned their interests of 10 per cent and five per cent respectively in the lease, ultimately giving Aiteo Eastern E&P Company Limited a 45 per cent interest in OML 29 and the NCTL.

Both the SPDC and the NNPC on Wednesday said in separate statements that Aiteo was yesterday handed over the assets, thereby increasing the participation of indigenous companies in the upstream sub-sector of the oil and gas industry.

Speaking at a brief ceremony to mark the signing of a Memorandum of Understanding (MoU) between SPDC and Aiteo for the transfer of Shell’s equity in OML 29 to the latter, the Group Managing Director of NNPC, Dr. Joseph Thlama Dawha, described the event as a milestone in the quest of the federal government to develop the capacity of Nigerians and Nigerian companies to play leading roles in every sector of the oil and gas industry as encapsulated in the Nigerian Content Development Act.

Also speaking in a similar vein, the Managing Director of SPDC and Country Chair of Shell Companies in Nigeria, Mr. Osagie Okunbor, described the event as a major step towards the fulfillment of “the nation’s aspiration of growing indigenous participation in the upstream sector of the oil and gas industry”.

He described OML 29 as one of the biggest onshore oil blocks that Shell has ever divested in the country.

“One of the key reasons we are divesting some of our assets in the country is to grow indigenous participation in the industry. With the divestment of OML 29, one of our biggest blocks to Aiteo, the local content
development in the country has received a major boost,” Okunbor said.

The Shell boss who put the value of the oil bock at $2.56 billion also disclosed that it has an average production capacity of 43, 000 barrels per day with a potential to grow beyond its current capacity in the nearest feature.

In his remarks, the Chairman of Aiteo Group, Mr. Benedict Peters, described the ceremony as a significant landmark that would help the company achieve its aspiration of participating in the entire value chains of the oil and gas industry.

“To us in Aiteo, this event brings a capping to our aspirations, visions and dreams. It has also brought tremendous value to our balance sheet. The reality of the asset is that it is the largest on-shore assets that Shell has ever divested,” he stated.

He expressed optimism that with the acquisition, the company will add significant value to the oil and gas industry and the nation’s economy, adding that: “The Local Content Act made us who we are today, without it, companies like us would  never have made it to this particular level”.

He expressed gratitude to the federal government for providing the enabling environment for indigenous companies to compete and grow in the oil and gas industry through the Local Content Act.

“We thank President Goodluck Jonathan and the Minister of Petroleum Resources who have driven the local content policy that has given birth to the Nigeria of our dream,” Peters said.

Corporate Media Relations Manager of Shell, Mr. Precious Okolobo, also confirmed that the oil giant had completed the assignment of its interest in OML 29 and the NCTL and related facilities in the Eastern Niger Delta.

According to the statement, SPDC’S interests in OML 29 and the NCTL were assigned to Aiteo Eastern E&P Company Limited, with total cash proceeds for Shell amounting to some $1.7 billion.

OML29 covers an area of 983 square kilometres and includes the Nembe, Santa Barbara and Okoroba fields and related facilities.

The NCTL, which is 100 kilometres long with a capacity of 600,000 barrels of crude oil per day, was inauguration in 2010 to evacuate crude to the Bonny Crude Oil Terminal (BCOT).

SPDC however stated that BCOT is not part of the transaction and would remain owned and operated by the SPDC Joint Venture.

The divested infrastructure includes flowstations together with associated gas infrastructure plus oil and gas pipelines within the OML.

OML 29 produced around 43,000 barrels of oil equivalent per day (100 per cent) in 2014.