OML 11: Ogoni leaders, NPDC agree to wipe Shell’s footprints

Sopuruchi Onwuka

The people of Ogoni land in Rivers State and the management of the Nigerian Petroleum Development Company (NPDC) have agreed to adopt a new operating model for oil and gas exploration and production in the area which hosts the Oil Mining Lease (OML) 11.

A federation of development associations in Ogoniland and the management of the NPDC pledged mutual cooperation on resumption of petroleum exploration and production operations in OML 11 in a manner that deviates from Shell’s legacy of environmental pollution and neglect of local communities in the area.

Managing Director of NPDC, Mr. Mohammed Ali-Zarah, was a peculiar guest at the Ogoni Liberation Day which held in Bori on Tuesday where the leaders of Ogoniland pledged to support NPDC) in the imminent resumption of operations in the territory.

The development comes as part of the field re-entry process by NPDC after the company was assigned the operatorship of the oil block by the parent Nigerian National Petroleum Corporation (NNPC), after the expiry of Shell’s abysmal tenure as operators of the asset.

Shell has since engaged the federal government in a legal tussle over the right of the Minister of Petroleum Resources, President Muhammadu Buhari, to decline its request for renewal of operating license on the block.

After scoring initial success at a Federal High Court on the prayer to retain its role in operating the field, an appellate court nullified the verdict and upheld that the minister holds the right of discretion on renewal of licenses.

In the meantime, the NNPC has directed the NPDC to activate oilfield operations at the mining lease; a directive that spurred the management of the company to woo the support of the host communities in re-entering the area where hostile clashes forced Shell to abandon its operations and flee.

According to NNPC, oil production operations under the operatorship of Shell were suspended in Ogoniland in the early 1990s due to disruptions caused by local unrest. The oilfields and other installations have since largely remained dormant and decrepit.

With energy transition threatening commercial sustainability of petroleum assets, and with Shell systematically reducing its onshore presence in the Nigerian petroleum industry, government had exercised its prerogatives to decline license renewal for Shell as operator of the oil block.

In a letter by President Muhammadu Buhari who is also the Minister of Petroleum Resources, the NNPC was assigned the responsibility to reenter the Ogoni oil fields for resumption of production operations.

The Ogoni Liberation Day provided the needed platform for the communities and the new operator to reach terms of cooperation.

In a position letter by their leaders, the Ogoni people demanded government to expedite the clean-up of the land “in tune with the UNEP Report’s recommendation or allow the Ogoni people to bring experts that would perfectly implement the recommendations of the UNEP Report to the letter,” and also provide infrastructure to the Ogoni people.

Convener and leader of the Ogoni Liberation Initiative, Rev. Douglas Fabeke, commended the Court of Appeal on confirming NPDC as the valid operator of OML 11, stressing that the Ogoni people welcome the takeover of the oil assets by NPDC. He described the judgment as liberation for the Ogoni people, who have “looked forward to this freedom over the years.”

He also praised President Muhammadu Buhari for his administration’s commitment to the development of Ogoniland, adding that Ogoni people would support all efforts aimed at restoring the environment and exploring its huge natural resources for the benefit of all.

Rev Fabeke declared that Ogoni leaders have resolved to work with government to ensure that the people benefitted from the resources in their land.

He said: “the Ogoni people are ready for oil and gas business in the land to entrench development in partnership with the NNPC and the Federal Government of Nigeria through a transformed template and practical community development delivered by the host communities.

“The Ogoni people are ready to do all forms of businesses with the State, Federal and Global Corporate Communities for the development of their land, provided the business is anchored upon Ogoni development.”

In his speech, Mr. Mohammed Ali-Zarah stated that NPDC and the federal government would work with the Ogoni people to bring development, employment and growth to the land, remediate the environment and ensure that future exploration and production activities do not impact negatively on the environment.

He noted that it was in the best interest of the country to speedily restore the environment of Ogoniland and create the needed condition for the social economic development of the communities.

“As a viable partner, we would join you to pursue the greater good of our people and the nation. We stand with you and would work with you to achieve this within the shortest possible time,” he said.

The new pledge of cooperation between NPDC and Ogoni communities played hard on the very theme that affected government’s decision to reassign the operating rights on the oil block from Shell which has a history of bitter and hostile relationship with most of its host communities in the Niger Delta.

Shell Petroleum Development Company (SPDC) Nigeria Limited operates Nigeria’s biggest oil and gas exploration and production joint venture with 25.6 percent stake. Government through the NNPC holds overriding 55 percent interest in the operations which is guided by joint operating agreement (JOA). Other partners with Shell are TotaEnergies and Eni.

Shell has run most of the joint venture assets into community relationship crises, forcing it to embark on cash recovery through a sustained divestment programme that offers joint 45 percent interest of the multinationals for sale on each asset. And OML 11 has dropped off Shell’s divestment list as operatorship forms part of the values on offer. Thus, many industry analysts believe that it would be impossible for Shell to safely reenter OML 11 given its deep seated animosity with host communities.