Elcrest Exploration and Production Nigeria Limited, a joint venture company of Eland Oil & Gas Plc, an oil and gas production, development and exploration company operating in West Africa with an initial focus on Nigeria, is poised to take over the operatorship of Oil Mining Lease 40 from the Nigerian Petroleum Development Company Limited.
NPDC, a subsidiary of the Nigerian National Petroleum Corporation, had in 2011 been assigned NNPC’s 55 per cent equity in eight assets divested by Shell, retaining the operatorship of most of the assets. They are OMLs 4, 26, 30, 34, 38, 40, 41 and 42.
Our correspondent had on May 10, 2015 reported that the inability of the NPDC to fully develop all oil fields under its control had limited the expansion of the nation’s oil and gas industry, citing experts’ views.
They thus recommended that indigenous private firms with capacity and expertise should be granted the right to operate those assets to ramp up exploration and production in the country.
Elcrest has received confirmation from the Department of Petroleum Resources that it has fulfilled its obligations, including the payment of the requisite premium and fees of $2.3m to the DPR, in relation to its appointment as operator of OML 40 for a minimum 10 year period, Eland said in a statement on its website.
It said the Ministry of Petroleum Resources had in turn advised the NNPC to proceed with the finalisation of the Joint Operator Model Agreement with Elcrest in respect of OML 40 as approved by the minister.
The company said the joint operating model agreement had been fully drafted and was currently under review by all parties, adding that the signing of the agreement was expected in the coming weeks.
The Chief Executive Officer, Eland Oil & Gas, Mr. George Maxwell, was quoted in the statement as saying, “We are delighted to have received consent from the Ministry of Petroleum Resources for Elcrest’s appointment as operator of OML 40.
“It only remains to complete a revised joint operating agreement between Elcrest and NPDC when a further announcement will be made.”
Production began on OML 40 in February 2014 through the ‘re-commissioning’ of two existing wells on the Opuama field, which had been previously shut in by Shell Petroleum Development Company since 2006.
The OML 40 licence, which lies within the Niger Delta, produces light oil with and has a very strong aquifer drive resulting in high ultimate recoveries.
Gross production from OML 40’s producing field, Opuama, was put at over 3,500 barrels of oil per day in the fourth quarter of 2014.
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