Unlocking  Stranded  Oil In OML 11 In Ogoni – DPR Has The Keys

By Dr. Eddie Wikina

The Department  of Petroleum  Resources  (DPR) is currently  running the 2020 bid round for 57 marginal  oil fields  located offshore,  swamp and onshore  terrains  in the Niger.

Delta. This exercise  is expected  to be concluded  this year 2020. The activities are run in accordance  with specific  Guidelines  made public as part of the bid process. When completed,  the fields will be allocated  to the oil companies  who successfully  scale

through  the Technical  and Commercial  tender evaluations,  and pay the required signature  bonus. Thereafter  the companies  will be given  license to enter into the fields, and commence  exploration  and development  to produce  oil and gas.

The 57 fields selected  carefully  excluded  all the fields in OML 11 within the geographical territory  of Ogoni, that have remained  locked in due to crisis in the communities  and insecurity.  The exclusion  was necessary  to avoid further  crisis, as every attempt  by the Nigerian  National  Petroleum  Company  (NNPC) to cede the Ogoni oil fields to an operating  company  for resumption  of Exploration  and Production  (E&P) activities  have failed,  since the forced  shut down in 1993 when the operator  SPDC, was chased  away. All the plans to get an operator  back have failed,  primarily  because  the attempts were done  secretly,  with selected  companies  not going through  an open and transparent process,  in line with recognized  industry  practices.  Some of these companies  included Belema  Oil, Robo Michael, TEN Oil, and more recently  Sahara  Energy. All these were rejected  by Ogoni  people  because  they were allegedly  forced  on them.

I have always  opined that any process  that wHi lead to successful  resumption  of E&P activities  in Ogoni must include  views and wishes  of the people; and they must be open and transparent.  Accordingly,   Ogoni people  have gone through  a wide stakeholder’s engagement   process,  to produce  a Template  to guide the process  of selecting  an Operator  who is acceptable.  The Template  addresses  the Needs,  Interests,  Concerns and Expectations  of the wide spectrum  of Ogoni people. The Template  is based on the model  of Partnership,  Respect,  Inclusiveness  and Participation.

The evolution of the Ogoni Template lays the foundation, and produces the opportunity for the DPR to seize and conduct a special bid round for the OML 11 oil fields in Ogoni. The same process applied in the current bid round for 57 marginal fields should be followed, but with the Guidelines refined to reflect the Ogoni Template. This is the key to unlocking the stranded vast oil and gas reserves within OML 11 in Ogoni. The fields should be thrown open to interested Nigerian oil companies, and award to follow any of these options:

  1. One oil field allocated to one company.
  2. Maximum of two oil fields awarded to one company.
  3. Combination of 1, 2 or 3 Companies awarded 1 or a number of fields.

The above will lead to reduced risk exposure for the companies, and also ensure reduced financial burden in raising capital for field development. Sharing of the fields

will create more employment opportunities, and lead to faster development to reach first oil. Awarding all the fields to one company is therefore not recommended. It is expected that the usual community incidents and crisis will be eliminated or substantially reduced, since the award process included the demands of the people as enshrined in the Ogoni Template.

Majority of Ogoni people have been yearning for resumption of E&P activities with some preconditions which include assurance of environmental safety, and meeting specific social and economic development needs. This recommendation addresses their needs and concerns, and will lead to early re-opening the Ogoni kingdoms to the much desired economic activities after 27 years of inactivity, that resulted in increased poverty, insecurity, militancy, illegal bunkering and environmental degradation. The key for this to happen lies with the DPR.

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