“No sale of oil blocks took place”
The former Minister of Petroleum Resources, Mrs. Diezani Alison-Madueke, has said that at no time were three oil blocks sold. She said that they were only assigned to Nigerian Petroleum Development Company (NPDC), the oil exploration and production arm of the Nigerian National Petroleum Corporation (NNPC).
Reacting to reports that the oil mining licences – OMLs 4, 38, and 41 – were improperly and illegally assigned to international oil and gas company, Seven Energy International Limited, through its Nigerian subsidiary Septa Energy Nigeria Limited, without open bidding, Diezani stated that the facts of the matter have been mixed up “as no sale of oil blocks took place at all”.
In a chat with journalists in Abuja, she said that the oil blocks remain assets of the Federal Government and if for any reason they were to be sold, it must pass through an open bidding, according to the rules guiding such transactions.
Explaining the origin of the transactions, she stated that Shell Petroleum Development Company (SPDC) had earlier sold their 45 percent Joint Venture equity in the blocks to a consortium of two Nigerian companies and their international partners. The Anglo Dutch company was the operator of the licences under a joint venture between NNPC (55 per cent); Royal Dutch Shell (30 per cent); Total Exploration & Production Nigeria Limited (10 per cent); and Nigeria Agip Oil Company (5 per cent).
Crude oil production in the three blocks is approximately 50,000 barrels of oil equivalent per day. To date, over 60 wells have been drilled in the three blocks.
In addition, she said that “Last year, NPDC used to do 40,000 barrels a day. We sat down with the management and asked them to prepare a strategic growth plan for NPDC, which they did. According to the growth plan, if we followed it in terms of moving assets or assigning certain assets to NPDC, over the next four years or so, by 2015, NPDC should move from a company that was producing approximately 40,000bpd when we came in last year, to one that will be producing about 265,000bpd per day and at which point they would be able to rub shoulders with the Petrobras (of Brazil) and the Petronas (of Malaysia) of this world.
Asked why the three oil blocks were not sold through open bid, she said there were no Federal Government’s blocks sold to anybody.
She explained: “If we were selling the blocks, of course there would have been an open bid. But these blocks were NNPC assets whose operatorship was only being transferred from Shell, the JV operator, to NPDC, which is an NNPC operating subsidiary. You don’t bid when you are assigning to your own subsidiary.
She said what transpired between NPDC and Seven Energy after the assigning of the oil blocks was “merely a transactional agreement and it was a funding agreement between both parties. There was nothing else in that transaction at all. The assets are intact and they still belong to Nigeria”.