The Attorney-General of the Federation and the Minister of Justice, Mohammed Adoke, has explained that either the Nigerian National Petroleum Corporation or any of its subsidiary can assign its interest to any partner.
The AGF, however, added that such must be done with the approval of the Minister of Petroleum Resources.
This was contained in a letter Adoke sent to the Senate Committee on Finance. The committee is looking into the alleged ‘missing’ $49.8bn oil revenue.
Adoke reminded them that the NNPC became involved in the Oil Mineral Lease following the decision of some oil firms to dispose about 45 per cent participating interests in such blocks which were under the Joint Venture Agreement.
Stating that some vital stakeholders, who sold off their interests in some OMLs, through Shell/NNPC JV agreement, to indigenous companies were Total, Agip and Shell. Adoke said he would soon give a verdict on the validity of how NNPC/ NPDC engaged some strategic partners in the said OMLs.
Part of the letter, which was made available to newsmen in Abuja, reads “I am of the considered view that the NNPC can legitimately transfer its participating interest in the OMLs to its wholly owned subsidiary, the Nigerian Petroleum Development Company as no law to the best of my knowledge and information, precludes such a transfer.
“It is instructive to note that by virtue of paragraphs 14-16 of the First Schedule to the Petroleum Act, CAP. P.10 LFN 2004(NNPC Act) and Regulation 4 of the Petroleum (Drilling and Productions) Regulations 1969 as amended, a holder of an OML or Oil Prospecting Licence can assign its interest provided the consent of the Minister of Petroleum Resources is obtained.
Adoke maintained that the relationship between the parties was governed by Article 19.2, which empowered any party to the agreement to transfer all or part of the participating interest after government consent. He said that this was done.
The letter added that Shell was the operator of the OMLs when Total, Agip and Shell decided to sell of their participating interests in the Shell/NNPC JV arrangement.
Adoke noted that the NNPC had the right to transfer the operatorship to NPDC, stating that as the only remaining non-operator, it was within NNPC’s authority to do so.
“Since NNPC was the only remaining non-operator and pursuant to the provision of Article 2.6.1 of the JOA, it transferred the operatorship of the OMLs to NPDC, its upstream petroleum subsidiary company. It follows therefore that the transfer was within NNPC’s authority.”
All rights reserved. This material, and other digital content on this website, may not be reproduced, published, broadcast, rewritten or redistributed in whole or in part without prior express written permission from PUNCH.