NNPCL Sacks Eroton, Takes Over JV Operation Of OML18

Oil Mining Lease 18’s operator, Eroton Exploration and Production Ltd, has been fired by NNPC Limited, and its subsidiary, NNPC Eighteen Operating Limited, has taken over.

The adjustment, according to NNPCL, was required to save the assets since they were no longer producing 30,000 barrels per day.

Communicating its decision over the lingering production issue, NNPCL stated: “In order to protect the Joint Venture investment in OML 18, the non-operating partners, NNPC Limited (55% interest) and OML18 Energy Limited (OML 18 Energy 16.20% interest), jointly owning 71.20% equity, removed Eroton as operator of the JV in line with the provisions of the Joint Operating Agreement (JOA). NNPC Limited and OML 18 Energy further appointed NNPC Eighteen Operating Limited as operator of the JV.
“The change in operatorship has been notified to the Nigerian Upstream Regulatory Commission (NUPRC) and communicated to Eroton. While the key business reasons that made the change in operatorship are compelling, it is publicly available information that production has declined from thirty thousand barrels per day (30,000 bpd) to zero.

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“The persisting inability of Eroton to meet the fiscal obligations of the Federal Government led to the sealing of Eroton’s head office in Lagos by the Federal Inland Revenue Service (FIRS) for more than twelve months due to non-payment of outstanding taxes to the Government.

“Eroton is also not able to remit to the JV parties the proceeds of gas supplied to its affiliate, NOTORE. A number of audits and investigations, including by the EFCC, NURPC’s work programme audit and others have been undertaken or are ongoing. Some of these audits are regulatory steps that may lead to licence revocation under the relevant Laws if drastic steps are not taken by non-operating partners.

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