An oil exploration and production firm with petroleum assets in Nigeria and Namibia, Lekoil, says it has dragged the Ministry of Petroleum Resources (MPR) to court over the delay in giving assent to its investments in Oil Prospecting Lease (OPL) 310
An oil exploration and production firm with petroleum assets in Nigeria and Namibia, Lekoil, says it has dragged the Ministry of Petroleum Resources (MPR) to court over the delay in giving assent to its investments in Oil Prospecting Lease (OPL) 310.
The company said it began to acquire stakes in the block, which is in shallow waters off-shore Lagos in 2013, but the ministry had failed to give any decision on the purchase of an additional 22.86% of Afren’s shares it made since 2016.
“Despite progressing exploration and appraisal activities on OPL 310 as previously announced, LEKOIL has, to date, not received Ministerial consent for its acquisition of the additional 22.86 percent interest in OPL 310 or a satisfactory explanation of why such consent has not been forthcoming,” Lekoil said.
It added that it decided to sue the ministry due to the indecision, which, it said is tying down its funds and ticking off time on their license
“As a result, the company has taken the decision to apply to the Federal High Court for a declaration that is expected to expedite the consent process and preserve the unexpired tenure in the license”.
The company noted that its first expression of intent in the oil block started with the purchase of a 17.14% participating interest and a 30% interest in Afren Investments Oil and Gas Nigeria LTD (AIOGNL) on February 1st 2013.
“On 1 February 2013, Mayfair Assets and Trust Limited, a subsidiary of LEKOIL, farmed into Afren Investments Oil and Gas (Nigeria) Limited’s (AIOGNL) interest in OPL 310 for a 17.14 percent participating interest and 30 percent economic interest, subject to Ministerial Consent from Nigeria’s Minister of Petroleum Resources. Ministerial
Consent was granted for the interest on 9 June 2017.
Afren PLC, the parent company of AIOGNL, was weakening and on 31st July 2015, it went into administration.
Lekoil said it then entered into an agreement with the company to purchase more of its stakes.
“On 31 July 2015, Afrenplc, the parent company of Afren Oil & Gas that held interests in the OPL 310 license, was put into administration and its asset put up for sale.
“On 1 December 2015, LEKOIL announced an agreement with the administrator of Afren and Afren Nigeria Holding Limited to acquire the shares of AIOGNL, which held a 22.86 percent participating interest in OPL 310. This interest was also subject to Ministerial Consent from the Minister of Petroleum Resources.”
The procurement of the stakes, Lekoil said, made it a technical and Financial partner to Optimum Petroleum Development Company- the local partner and operator of the block.
“The acquisition meant that LEKOIL would hold a consolidated participating interest of 40 percent and an economic interest of 70 percent in OPL310 and would become the technical and financial partner of Optimum Petroleum Development Company, the operator and local partner in OPL310, which retains a 60 percent participating interest.”
The company said that an application for the transfer of the 22.86 percent interest was duly made by Afren Nigeria in January 2016 as was reported by Business Day newspaper then.
Lekoil said though it was informed it that the requisite due diligence will be conducted in March of 2016, since then, the company has not heard from the ministry or the Department of Petroleum Resources (DPR).
The OPL license includes the potentially large Ogo oil discovery, which is the sole well that has been found within the acreage of the lease.
“The delay in regulatory consent for LEKOIL on the block stands in the way of the company’s plans for the development of a work program for the Ogo field (the only discovery on the block,” the company said.