Wike unseals Shell’s operational base as NNPC GMD intervenes
Ben Eguzozie is business a.m. regional lead based in Port Harcourt, providing regional and national coverage for economy, business and finance
You can contact him on ben.eguzozie@businessamlive.com with stories and commentary.
- Out-of-court settlement of feud possible
- Kyari says negotiation continues
Governor Nyesom Wike of oil-rich Rivers State, apparently bowing to pressure from oil industry major players, unsealed the Kidney Island operational base of Shell Petroleum Development Company (SPDC), a facility it sealed a week ago, in the guise of acting on a court judgement.
The governor’s latest action follows an indoor meeting on December 31, 2020 in Port Harcourt with Mele Kyari, the group managing director of the Nigerian National Petroleum Corporation (NNPC).
Both parties may proceed to negotiations, possibly leading to an early out-of-court settlement of the brewing epic battle over the multi-billion-naira oil facility later.
The governor directed the state’s ministry of justice and the attorney-general, Zacchaeus Adangor to immediately reopen the facility, which is also part of Oil Mining Lease (OML) 11, located at Abonnema Wharf in Diobu area of Port Harcourt metropolis.
The meeting in Port Harcourt between Governor Wike and Kyari, the NNPC GMD saw the two men emerge, with the governor directing the immediate reopening of the Kidney Island oil base; while Kyari commended the governor and the state government for cooperation.
Kyari hinted that “further discussion to resolve the underlying issues (would) continue.”
The face-off began on December 23 last year, when Governor Wike announced the state’s takeover of the oil base, saying it was enforcing her interest in the acquisition of 45 percent equity stake in OML 11. The state attorney-general and justice commissioner, Adangor went on to seal-off the premises. He told journalists that he was acting on the authority of a state high court judgement in July and September 2019.
Kidney Island, an onshore oil base on Abonnema Wharf of Diobu, Port Harcourt Municipality, has been used as Shell’s operational base for several decades. “Kidney Island, which was once used as Shell Petroleum Development Company operational base in Port Harcourt, now belongs to the Rivers State Government pursuant to a certificate of purchase registered in the Lands Registry as No. 6 at page 6 in Vol. 46, Port Harcourt,” Adangor said. He stated that the certificate of purchase of the facility “was issued by the order of the High Court of Rivers State on July 23, 2019 and September 25, 2019 following the purchase of the facility. He said in November (2020), the Supreme Court reaffirmed Rivers Government’s acquisition of SPDC’s interest in OML 11 and Kidney Island, when it dismissed the oil firm’s suit which sought to set aside the judgment made against it in 2019 in favour of the Ejama-Ebubu community.But Shell in a response, dismissed the purported takeover of the oil facility, arguing that it is still the subject of ongoing litigation at the Court of Appeal sitting in Port Harcourt. The company said, the sealing of Kidney Island asset or other assets of the SPDC Joint Venture was premature and prejudicial to the ongoing court proceedings, and therefore not recognised.
“Under the Nigerian Petroleum Act, any acquisition or assignment of interests in a licence or lease would require the consent of the Minister of Petroleum. No such consent has been given in the case of the purported acquisition by the Rivers State Government. In addition, the ruling of the Supreme Court on 27 November 2020 did not decide liability or the size of the award in the underlying suit of Chief Ogbara & Others Vs SPDC neither did the ruling affirm the purported sale of SPDC JV’s assets to the River State Government as being claimed by the state. SPDC therefore, calls on the Rivers State Government and those claiming interest in the SPDC Kidney Island asset to stay further action to allow the due process of the law as enshrined in the Nigerian Constitution. We remain of the view that until the pending appeals are heard and determined, any exercise of rights including any attempt to take over or seal up SPDC JV’s assets by the Rivers State Government is premature and unlawful,” said Bamidele Odugbesan, media relations manager of the oil giant in a statement sent to Business A.M. last week.