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DPR withdraws licenses of six oil blocks over ‘legacy debts’

ON Thursday, Nigeria’s petroleum regulator Department of Petroleum Resources, DPR, announced the revoking of six oil bloc licences belonging to five oil firms in a bid to address the nation’s legacy debts.

The directive which was issued in a statement by the industry regulator is coming on the heels of the Federal Government’s resolve to take an aggressive stance to “recover legacy debts” that are owed the country by oil companies. It also includes rescinding licenses of oil blocs that are not being actively developed.

Legacy debts refer to debts that were incurred and inherited as part of an asset.

The Federal Government withdrawals of the five Oil Mining Licenses, OML, and one Oil Prospecting Lease, OPL, in the onshore, shallow water and deepwater Niger Delta basin was due to alleged non-payment of royalties.

The assets affected include OML 98 controlled by Pan Ocean Oil Corporation, OMLs 120 and 121, held by Allied Energy Plc, now Erin Energy which is currently bankrupt, OML 108, owned by Express Petroleum & Gas Company Limited, and OML 110 held by Cavendish Petroleum Nigeria Limited.

The notice also said oil prospecting license, OPL 206 was revoked. It was previously held by Summit Oil International, a company owned by the family of late Moshood Abiola. 

However, the Pan Ocean Joint Venture, JV, in OML 98 has control of only six fields.

In February, the Nigerian National Petroleum Corporation, NNPC, had sent a letter to companies through its debt-collection arm, citing what it called outstanding royalties and taxes for oil and gas production.

Royal Dutch Shell, Chevron, Exxon Mobil, Eni, Total and Equinor were each asked to pay the central government between $2.5 billion and $5 billion, according to reports.

A total of 42 oil block licences held by some international and indigenous operators is due to expire this year, according to data obtained from the DPR.

The renewal of the licences is expected to boost government revenue and encourage more investment in Nigeria’s oil and gas industry.

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