Eroton Loses Oilfield Asset To NNPC, Head Office Locked

Eroton Loses Oilfield Asset To NNPC, Head Office Locked

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Eroton Exploration and Production Limited has been removed as operator of the oil mining lease (OML) 18, which it co-owned with the Nigerian National Petroleum Company (NNPC) Limited.

The NNPC, the major stakeholder in the oilfield, replaced Eroton Exploration with NNPC Eighteen Operating Limited, putting an end to the contract between Eroton and the Federal Government. 

This was disclosed by the NNPC spokesperson, Garba Muhammad, in a statement on Monday, where it was revealed that the takeover was to revamp production in OML 18, which has stopped pumping oil in the last two years.

According to the statement, “In order to protect the joint venture (JV) investment in OML 18, the non-operating partners, NNPC Limited (55 percent interest) and OML 18 Energy Limited (“OML 18 Energy” – 16.20 percent interest), jointly owning 71.20 percent equity, removed Eroton as operator of the JV in line with the provisions of the joint operating agreement (JOA). NNPC Limited and OML 18 Energy further appointed NNPC Eighteen Operating Limited as operator of the JV.” 

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Muhammad also stated, “The change in operatorship has been notified to the Nigerian Upstream Regulatory Commission (NUPRC) and communicated to Eroton. While the key business reasons that made the change in operatorship are compelling, it is publicly available information that production has declined from thirty thousand barrels per day (30,000 bpd) to zero.” 

The statement reads further, “NNPC Limited in particular, as majority shareholder with a unique stewardship responsibility to the federation, is committed to assuring the energy and financial security of the country is uppermost in its business decisions.” 

“Removing an operator in these circumstances is therefore inevitable in order to protect the JV from governmental or third parties action from entities, including Eroton’s lenders and other service providers,” NNPC added. 

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Also, the NNPC revealed that the head office of Eroton has been shut down for two years by the Federal Inland Revenue Service (FIRS) for alleged failure to pay outstanding taxes and meet the fiscal obligations to the federal government. 

Meanwhile, recall that Prime Business Africa previously reported a week ago that Eroton absolved itself of fault for OML 18’s inability to produce oil and gas two years on. 

Eroton also claimed then that it remains the operator of OML 18, as the proper procedure to take over the asset hasn’t been followed.

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