OML 25: NNPC brokers truce between Shell, Belema oil

Shell reports falling profit amid oil price slump
Shell Head Office

The Nigerian National Petroleum Corporation (NNPC) with its joint venture partners, Shell Production Development Company (SPDC) and Belema OIL, have resolved the dispute on the operation of Oil Mining Lease (OML) 25.

The feuding group at the signing of the dispute closure agreement in Abuja on Tuesday agreed that operations at the oil well would take off in the next 10 days.

The Minister of State for Petroleum Resources, Timipre Sylva, while signing the agreement, thanked all the parties stressing that the step signified the beginning of a new chapter in the industry.

Mr Sylva said the aim of the ministry was to ensure an oil industry that worked and operated in harmony and in unity.

“When I came into the office, the issue was one of the problems that came on the table; there were so many letters from communities complaining about the problem.

“I just decided to invite Shell to hear its own part of the story but fortunately, the Group Managing Director of NNPC, Mele Kyari, had intervened in the matter.

“So, I have the honour now to thank him for this great intervention.

“And also thank Shell and Belema for cooperating to ensure that there is closure to this matter that has bedeviled the industry for so long,” he said.

He said one of the aims of the Petroleum Industry was to ensure zero loss in the industry and production got to destination.

According to him, zero loss is not loss from pipelines but lost to the country, especially with assets that can produce but for some reasons bug down by leakage issues.

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He said that the biggest beneficiaries of the agreement were not the companies but the communities, especially those in Belema which had been suffering since the beginning of the dispute.

The minister commended the NNPC, Shell and the Belema Oil for agreeing to resolve the dispute.

Earlier, Mr Kyari said the development was a big achievement for the corporation.

The NNPC boss said the dispute around the OML 25 had been on for over two years, adding that the end result was that communities lacked peace with the disruption of property and social lives in the area.

“For us, the most important aspect of the dispute resolution is that, at least, the communities will have their peace restored.

“At the back of it, you are aware that there is a complete stoppage of petroleum operations around the OML 25 and adjoining blocks.

“What this means is shut down of production of over 35,000 barely of oil every day in the last two years and that is enormous economic loss for all stakeholders, Nigeria and the communities.

“This is why we engaged all stakeholders and we are happy to announce today that the closure has been obtained.

“It means that the communities will have their peace back and also commence operations with the OML 25.

“That means that there is prosperity for the community and also some returns to shareholders of Belema Oil, NNPC and Nigeria at large,” he said.

Mr Kyari commended the Belema Oil for its role and assured full engagement of the communities, adding that all the parties would be taken care of.

The NNPC boss also said all opportunities found would be shared equitably for overall peace and development of the country.

He commended the minister of petroleum for his support and assured that the operations would soon commence in the area.

Also, the Managing Director of Shell, Osagie Okunbor, said the dispute had been for two years but “we are happy that we concluded on resolving the dispute.

“I want to convey my deep appreciation to the GMD of NNPC for the intervention to bring this issue to a closure.

“When dispute of this nature happens, every one suffers, especially the immediate family, recipient community not to talk of investors like ourselves.

“We have been in discussion with communities and Belema Oil and sometimes under the auspices of government.

“We are very pleased that we have finally brought this to a conclusion, to work on some agreements with communities to achieve speedy return to operations on that facility,” he said.

He said to meet the plight of the host communities, Shell had paid in the Joint MOU account, over N300 million to restart community efforts it had not done because of some issues.

Mr Okunbor said under the joint MOU framework, monies would be paid into communities’ accounts to execute projects to ensure that employment opportunities get to the people.

He noted that SPDC remained the operator of the OML 25 but assured commitment to ensure that all parties would derive from the benefits.

The President and Founder, Belema OIL, Jack Rich-Tein, also said the agreement signaled that stakeholders shared common interest and value of lifting the country high and strengthening relationships.

“What has been resolved is that, we have agreed to work together, SPDC and Belema Oil.

“Belema Oil is now going to be able to create a lot of employment opportunities for the communities under operations and maintenance part of the operations.

“SPDC remains the operators because they still have the licence, the communities will be happy because we will employ them and they will be able to work with SPDC.

“The key thing there is getting back to work and creating jobs for the local communities, everybody will be happy.”

He said that Belema Oil with 7.7 per cent asset would provide the operation maintenance and employ the community members through that platform.

The founder said Belema Oil would work with shell to ensure that the development needs of the people were met.

“We have agreed that less than 10 days from today, we will visit the communities and appeal to them and then, we go to work,” he said.

The News Agency of Nigeria (NAN) reports that operation in OML 25 stopped since in 2017 when the host communities sent SPDC away from operating in the facility over issues of unemployment and underdevelopment among others.

(NAN)

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