NNPCL takes over OML 18 as EFCC investigates Eroton

Following 18 months of inactivity caused by a variety of issues thought to include the diversion of funds, governance infractions, and indebtedness to JV partners, the management of the Nigerian National Petroleum Company Limited has taken over the operatorship of the Oil Mining License (OML).

Other reasons given for the takeover included Eroton's inability to meet contractual obligations, inability to meet work programs, inability to deliver on its committed Field Development plan, prolonged debt to the Federal Government, and the FIRS's closure of office premises for over a year.

According to a top industry source, NNPCL secured the asset's operatorship with the support of the Nigerian Upstream Regulatory Commission, while the Economic and Financial Crimes Commission stepped in to investigate allegations of financial impropriety and fraud leveled against Eroton's management.

According to the source, the EFCC is currently securing sensitive documents and investigating Eroton's operation of OML 18 since its inception.

According to the source, the NNPC previously commissioned a forensic audit into Eroton's handling of OML 18, which revealed a slew of issues such as 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.

Among other things, these findings prompted the NUPRC to refer the case to the EFCC for further investigation.

Despite the problems with the NCTL pipeline, Eroton is said to owe Shell and Aiteo over $80 million in outstanding levies, as well as all of the barge operators it hired to evacuate the crude.

"This whole situation is quite unfortunate," the source continued, "especially in times like these 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.

According to our source, the decision was met with praise from industry observers and host communities, who saw the new development as a "new lease on life" given the asset's decrepit state under Eroton's management.

"This is a step forward for Nigeria and the good people of the Niger Delta, ensuring that OML 18 is operated in accordance with global best practices, with attendant optimal and beneficial outcomes for all stakeholders," the source added.

Eroton, located in the Eastern Niger Delta and covering a total area of 1,035 Sqkm in onshore swamp terrain, joined OML 18 in 2015.

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