FG revokes six oil licences to ‘recover legacy debts’

0
SHARE

The Department of Petroleum Resources (DPR) has revoked five oil mining licences (OML) and one oil prospecting licence (OPL) belonging to five companies.

In a public notice issued on Thursday, the regulatory body said the revocation was based on a presidential directive to “recover legacy debts” owed by the companies operating the licences.

The five companies affected are Pan Ocean Oil Corporation (OML 98); Allied Energy Resources Nigeria, (OML 120 and 121); Express Petroleum and Gas Company (OML 108); Cavendish Petroleum Nigeria (OML 110) and Summit Oil International (OPL 206).

The revoked licenses are located in the onshore, shallow and deepwater areas of the Niger Delta basin.

Pan Ocean is owned by Festus Fadeyi, billionaire businessman, while Allied Energy, which is now known as Erin Energy, has Kase Lawal, founder of Camac Energy, as its chairman. Express Petroleum, operators of OML 108, is technically managed by Shebah Exploration & Petroleum, a company owned by Bryant Orjiako, chairman of Seplat Petroleum Development Company, while Cavendish Petroleum has Mai Deribe as it’s chairman.

Summit Oil International, operators of OPL 205, also known as the Otien field, was co-founded by the late MKO Abiola.

A recent report by the Nigeria Extractive Industries Transparency Initiative (NEITI) had listed Pan Ocean, Allied Energy among oil companies owing the Nigerian government some royalties in 2016.

The report said, despite being in a Joint Venture (JV) arrangement with government, Pan Ocean did not remit tax payments.

NEITI had urged the DPR to investigate the defaulting companies and ensure that government recover outstanding revenues.

“The non-payment by these companies will result in revenue loss to the federation. It is worthy to note that Pan Ocean did not make any financial payments in 2016, despite being in JV arrangement with the federation,” the NEITI report had read.

Pan Ocean, Allied Energy and Express Petroleum were also listed among 31 companies that defaulted in the payment of Education Tax (EDT) in 2016.

A 2 percent EDT is usually levied on the assessable profits of oil and gas companies operating in Nigeria.

In February, Ibe Kachikwu, minister of state for petroleum resources, said the federal government recovered N1.2 trillion in royalty arrears from oil companies operating in the country.

He said the “aggressive royalty recovery” was possible following the launch of new automation processes that track production and shipment of crude oil.

Kachikwu said oil firms yet to remit outstanding royalties to the government at the expiration of the agreed deadline, may have their licences revoked — an action that serves as the ultimate penalty for defaulters.

Following this, the ministry filed a request to revoke the affected licences which led to the presidential order to recover outstanding payments.

LEAVE A REPLY

Please enter your comment!
Please enter your name here

This site uses Akismet to reduce spam. Learn how your comment data is processed.