Nigeria News

NIGERIA: Six Years After, FG Renews Chevron’s Licence for 20 Years

Exactly six years after the operating licence for Chevron’s Oil Mining Leases (OMLs) 83, 85, 88, 89, 90, 91 and 95 expired in December 2008, after 40 years of issuance, the federal government has renewed the licence for these seven leases for another 20 years, THISDAY has learnt.

Chevron Nigeria Limited operates these seven acreages and five others – OMLs 49, 51, 52, 53 and 55, under a joint venture with the Nigerian National Petroleum Corporation (NNPC), with Chevron having 40 per cent interest, while the national oil company holds 60 per cent.

Before the renewal, Chevron had commenced the divestment of its 40 per cent stake in five of these 12 acreages.

THISDAY gathered that Chevron applied for the renewal of the license since 2006, two years before the expiration.

It was however, not clear why the federal government delayed the approval for six years after the expiration; neither was it clear why the recent approval by the Minister of Petroleum Resources, Mrs. Diezani Alison-Madueke, was kept out of the public glare, unlike the renewal of the Mobil license for 20 years, which was signed in full public glare in February 2012.

Chevron’s General Manager in charge of Policy, Government and Public Affairs (PGPA), Mr. Deji Haastrup, declined to comment on the matter, despite several e-mails and text messages.

But a top official of the company, who did not want to be quoted, confirmed the renewal to THISDAY but declined to give details on the reserves capacity of the seven acreages, as well as the financial commitment of Chevron to the federal government, with regards to the renewal, citing “charged political atmosphere.”

He stated that the renewal would inspire the confidence of Chevron and other International Oil Companies (IOCs) in Nigeria’s operating environment, which has been characterised by uncertainty due to the non-passage of the Petroleum Industry Bill (PIB).

The relevant officials of the Department of Petroleum Resources (DPR) also declined to comment on the matter when contacted by THISDAY.

Chevron’s earlier attempt to divest its 40 per cent stake in OMLs 52, 53 and 55 to encourage indigenous companies was stalled in protracted litigation as one of the bidders, Brittania-U Nigeria Limited dragged the company to court, seeking among other reliefs, a declaration that its final bid offer of $1,015,000,000.00 should be accepted by Chevron.

Controversy had also trailed the clinching of Chevron’s 40per cent stakes in OMLs 83 and 85, by First Exploration and Production (First E & P), as another Nigerian independent company, Petroleos De Geneve (PDG) was said to have protested against alleged manipulations, appealing to the government not to approve the deal.
Petroleos De Geneve was said to have claimed that it submitted higher bids than First E & P in the OMLs 83 and 85 transactions.

By the terms of the bidding process, the bidders were required to provide stand-by Letters of Credit (LC).

But Chevron was said to have notified Petroleos De Geneve that it did not receive written confirmation from a South African bank on the Letters of Credit issued by the bank to PDG.

However, PDG had claimed that contrary to Chevron’s position that it did not receive confirmation from the South African bank, the bank actually confirmed their LC to Chevron.

Though its performance results for 2014 are not yet available, Chevron is Nigeria’s third largest producer after Shell and ExxonMobil, with net daily production averaging 233,000 barrels of crude oil, 182 million cubic feet of natural gas and 5,000 barrels of Liquefied Petroleum Gas (LPG) in 2013.

Alison-Madueke had promised as far back as in May 2012 that Chevron’s license would be renewed in June the same year but the promise was not fulfilled.

Speaking in May 2012 at the “Ministerial Platform” in commemoration of Nigeria’s Democracy Day, Alison-Madueke said the federal government would renew Chevron’s license in June 2012, as a follow-up to the renewal done in favour of ExxonMobil earlier in February.

“In order to ensure our commitment in the vibrant upstream sector, we have had to provide security for investors and we have started the renewal of leases in good faith; firstly with the NNPC/Mobil Producing Nigeria joint venture which was done a couple of months ago in respect of OMLs 67, 78 and 70 in our shallow waters.
Other renewals which have to do with Chevron and Shell are expected to be concluded by June at the latest.”

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.