Investment in OML 42 at risk over picketing

The Management of Neconde Energy Limited, a member of the Obijackson Group and operator of the Oil Mining Lease, OML 42, has said that the company risks losing investment of $558 million (N200.8 billion) due to the dispute between the company and members of Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN)

The Managing Director of the company, Frank Edozie, disclosed this during an interactive session with journalists in Lagos while cautioning PENGASSAN over its plans to picket the company.

Edozie, said that despite the tripartite agreement between his company and PENGASSAN on the review of severance packages for the workers, the union has threatened to shut down the operations of the company beginning from Monday.

According to him, “a component of our strategic goal for the year is to achieve an estimate of 60,000 barrels per day (bpd). This has led us to develop ‘barged production’ as an alternative to crude evacuation using the Trans Forcados Pipeline, which has been out of service since 13th February 2016.

“We have also undertaken some strategic steps, such as the rehabilitation of Batan and Odidi Flow stations to enable the achievement of our targeted peak gross production rate, revamping of Jones Creek and Egwa Fields for workover of existing wells and development of other infrastructure which included refurbishing a gas Central Processing Facility (CPF) in Odidi as well as commencement of re-entry of Odidi, Jones Creek fields Egwa 1 & 2”

However, the Chairman of Obijackson Group, Dr. Ernest Azudialu-Obiejesi, expressed shock that PENGASSAN will decide to shut down offices of the Group having agreed with the union that by the August , the agreement reached in March , regarding the review of the severance packages, would be implemented.

According to him, “in March, we agreed with the union that by August 2017, we will pay the severance allowance and the 13th month salary based on our projections that by then we would have achieved our 60,000 bpd target. We are owing 10 banks from which we obtained the $558 million we paid Shell in 2012 for 45 per cent stake acquisition of OML 42.

“We have also invested billions of dollars to develop the field but due to unfortunate incidents of pipeline attacks by the militants last year, we have been having cash flow challenges and the banks are also on our neck to service the loans.”