The management of the Nigerian National Petroleum Company Limited has taken over the operatorship of the Oil Mining License (OML) 18 following months of inactivity caused by a multitude of issues thought to include the diversion of funds, governance infractions, and indebtedness to JV partners.
Other reasons given for the takeover were Eroton’s inability to meet contractual obligations, inability to meet work programmes, inability to deliver on its committed Field Development plan, prolonged debt to the Federal Government, and closure of office premises by the FIRS for over a year, among others.
A top industry source disclosed that NNPCL had secured the operatorship of the asset with the backing of the Nigerian Upstream Regulatory Commission while the Economic and Financial Crimes Commission had stepped in to investigate allegations of financial impropriety and fraud levelled against Eroton’s management.
According to the source, the EFCC is currently securing sensitive documents and combing through financial dealings of Eroton’s operatorship of OML 18 since its inception.
The source confirmed that it was discovered that the NNPC had previously commissioned a forensic audit into Eroton’s handling of OML 18 which revealed a multitude of issues including non-payment of oil royalties, mismanagement of funds, insider dealings, using JV funds for personal debt servicing, non-remittance of taxes, technical incompetence, loss of value to Joint Venture partners and zero lifting of oil since July 2021.
These findings, among others, prompted the NUPRC to refer the situation to the EFCC for further investigation.
Although there had been issues with the NCTL pipeline, Eroton is said to owe both Shell and Aiteo over $80m in outstanding levies and all the barge operators it had hired to evacuate the crude.
The source further said, “This whole situation is quite unfortunate, especially in times like this when the government should be earning large amounts from fields like this that are capable of at least 60,000bbls p/d.”
“As we speak, the Eroton office in Victoria Island, Lagos has been sealed by the Federal Inland Revenue Service over non-remittance of taxes to the government running into tens of millions of dollars. Eroton is currently bogged down by numerous court actions including winding up litigations against the company by several parties, not to mention allegations of fraud and gross financial mismanagement. It is in the best interest of the nation that the asset has been taken over by NNPCL to facilitate the seamless restoration of operations on OML 18,” the source stated.
Our source further noted that the decision had been greeted by commendation by industry watchers and host communities who regarded the new development as a “new lease of life” considering the decrepit state of the asset under operatorship by Eroton.
“This is a step in the right direction for Nigeria and the good people of the Niger Delta that ensures OML 18 is operated in compliance with global best practices with attendant optimal and beneficial outcomes for all stakeholders,” the source added.
Located in the Eastern Niger Delta and covering a total area of 1,035 Sqkm in onshore swamp terrain, Eroton became an operator in OML 18 in 2015.
(TNT)
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