Eroton Exploration and Production Company Limited, on Wednesday, insisted that it remained the operator of OML-18 in line with the provisions of the Joint Operating Agreement.
It was recently reported that the non-operating joint venture partners of Oil Mining Lease 18 had appointed NNPC Eighteen Operating Limited as operator of OML 18 to replace Eroton Exploration and Production Limited.
The report stated that Eroton was removed to curtail further degradation of the asset and revamp the production of oil and gas on it, according to a statement issued in Abuja at the time by the Chief Corporate Communications Officer, Nigerian National Petroleum Company Limited, Garba-Deen Muhammad
But on Wednesday, Eroton argued that any dispute whatsoever between the parties were reserved exclusively for resolution under the dispute resolution clause of the JOA.
According to the management of the company, the actions of the other JV partners (NNPC and Sahara) remained illegal and ran contrary to the rule of law and in total breach of the terms and conditions stipulated in JOA.
In a statement signed by its Managing Director, Emeka Onyeka, Eroton said, “The company as the operator of OML-18, remains committed to transparency, integrity, and due process, and urged the public and stakeholders to disregard any misinformation as we continue to operate in compliance with all applicable laws and regulations.”
It said the statement was necessitated by the false information recently disseminated in the media on the status of operatorship of OML-18 and about Eroton Exploration and Production Company Limited.
“In complete breach of the terms of the Joint Operating Agreement governing OML-18, and with total disregard for due process, the non-operators of OML-18; NNPC Limited and Sahara Field Production Limited (Sahara) (now known as OML 18 Energy Resource Limited) appointed a company, NNPC Eighteen Operating Limited as operator of OML-18,” Onyeka said.
He said Eroton, which was validly appointed Operator of OML-18 via a legal and contractual process involving all the participating entities in the JOA, had approached the relevant courts to defend its legal rights.
“Eroton has issued Notice of Arbitration to NNPC and Sahara in accordance with the terms contained in the JOA.
“On the basis of the lack of any grounds for the purported takeover of operatorship in accordance with the terms of the JOA governing the block, lack of due process and flagrant breach of the rule of law,” Onyeka stated.
He said Eroton had considered legal opinion to the effect that the status quo ante continued to remain the position and same would be upheld by the courts of Nigeria.
He argued that if the action taken by NNPC and Sahara was allowed to persist, it posed a threat on all the JOA’s in Nigeria involving both multinational and indigenous oil and gas companies, because due process with regard to dispute resolution had not been followed.
According to him, there would be no removal of an operator without following the laid down procedures and processes in Article 2.4 of the JOA.
“The process is designed in such a way that notices requirements cannot be waived and the removal of operatorship cannot be carried out without following the process provided in the JOA,” Onyeka said.
The company said Eroton took over operatorship of OML-18 in 2015 with a meagre production of 6,000 barrels of crude oil per day and increased production to over 50,000 bpd of dry crude (75,000 bpd of gross liquids) within a period of less than 24 months.