…targets 250,000 barrels daily production from oil bloc
Rivers State has bought over Shell’s 45% stake in the Oil Mining lease (OML) 11 at $150 million (£ 121.88 million).
The field has been abandoned by Shell for 25 years.
Governor of the state, Nyesom Wike, who declared this yesterday, maintained that the field had the potential to produce 250,000 barrels per day (bpd).
The state, Reuters reported in a follow up document, had with this, purchased the stake from Royal Dutch Shell’s (RDSa.L) in the licence in the restive Ogoniland region.
“The block under licence, OML 11, has been undeveloped for nearly 25 years, since the execution of regional activist, Ken Saro-Wiwa under the military government of Sani Abacha,” the report read.
The field is among several onshore assets that Shell had been trying to sell in Nigeria.
Talks with at least, one potential buyer fell through due to the tense nature of community relations, Reuters reported, quoting sources.
Nigeria currently produces roughly 2 million bpd of crude oil and condensates daily.
Wike announced that the state has acquired 45 per cent of Shell Petroleum Development Company of Nigeria (SPDC) Oil Mining Lease (OML) 11 in Ejama Ebubu community in Eleme Local Government Area and the surrounding Ogoni communities.
Wike, in a live broadcast to the state at the Government House, Port Harcourt, noted that after a series of court cases, the host community of Ejama Ebubu brought against Shell over pollution, and won, the state government decided to jointly bid with the host communities for the 45 per cent stake.
The governor noted that after the court ordered Shell to pay the host communities the sum of N194 billion, the oil giant agreed to pay only N7 billion, which was turned down.
He added that after the court granted the host community’s request to auction off Shell’s immovable property, they then advertised the auction in the newspapers, which interested the state.
He said: “I am delighted to inform you that the Rivers State Government has fully acquired Shell Petroleum Development Company of Nigeria (SPDC) 45 per cent interest in Oil Mining Lease (OML) 11 situated in Ejama Ebubu community in Eleme Local Government Area and the adjoining Ogoni and other communities of Rivers State.”
Wike explained that the acquisition of OML 11 revolves on court judgements, which have been registered in the United Kingdom and Nigeria for enforcement.
He said: “This fresh case commenced in 2001, passed through four different justices of that Court arising from twists and turns associated with opposed litigations, until it was disposed of about 10 years after in June 2010 by Buba J. (the fifth judge to preside over the matter).
“SPDC and its parent companies appealed the judgement at the Court of Appeal in 2010, which again suffered the twists and turns passing through six different panels comprising three justices each between 2010 and 2017 before it was finally disposed of by the panel of that Court led by Gumel JCA of the Port Harcourt Division. The appeal was dismissed.
“SPDC and its parent companies took out a further appeal to the Supreme Court of Nigeria in 2017, which appeal was considered and dismissed by that Court in a judgement read by Hon. Justice B. Akaahs, JSC, delivering a lead judgement in a unanimous decision. After losing at the High Court, SPDC gave the successful Ejama Ebubu Plaintiffs a Bond Guarantee stipulating that First Bank of Nigeria Limited would pay them the value of the judgement debt and interests thereon in the event that SPDC’s appeal to the Court of Appeal fails at that Court. The original Bank Guarantee is still with the Community.
“When SPDC’s appeal failed at the Court of Appeal, Shell instructed the Bank to dishonour their guarantee, which did and gave rise to a series of six different litigations in various Courts against First Bank and the Central Bank of Nigeria. SPDC’s excuse was that they had lodged an appeal at the Supreme Court of Nigeria.
“The enforcement cases had been to Owerri, Abuja, Lagos, etc. in six different lawsuits. On the 11th of January 2019, Shell’s appeal was dismissed at the Supreme Court of Nigeria.
“The judgements of the High Court, the Court of Appeal and the Supreme Court were registered in the United Kingdom for enforcement over there against SPDC’s parent companies domiciled outside Nigeria’s shores.”
Wike said upon the advertisement of the said immovable assets for auction, the Honourable Attorney General and Commissioner for Justice of Rivers State alerted the Government of the state.
He explained the reasons why the state government resolved to purchase OML 11.
He said: “That the impact is still there and un-remedied since 1970 as admitted by SPDC vide letters they wrote seeking to clean the spill in 2006, while the case was at the trial Court; “That the Rivers State has suffered the worst impact of environmental degradation resulting from oil related operations; “That the very difficult swamp and mischievous waterlogged terrain of Rivers State has impeded development as a result of increased construction costs on the near and non-existent infrastructures and attendant rapid decay of the little we have been able to achieve as a result of oil related acid rain and black sooth enveloping the state; “That these phenomenal degradation and impoverishment had continued with the decline of revenue and inflation, lack of employment of well-educated Rivers State youths, idleness and restiveness arising from want; “That SPDC is said to have paid the sum of USD 2,000,000 (two million United States Dollars) only for the renewal of their operatorship and interest in the said OML 11 to the Federal Ministry of Petroleum Resources; “That for the past 25 years, the rich oil potentials of OML 11 have remained untapped following the hanging of the world-renowned Ogoni poet and environmental activist, Mr. Ken Saro Wiwa and the Ogoni 9 as well as the unfortunate mob lynching and death of four prominent Ogoni citizens, one of whom was the Secretary of Government of Rivers State and another, a Commissioner under the tenure of Lt. Col. Dauda Musa Komo as Governor of Rivers State.