LEKOIL Limited has instituted a lawsuit against the Federal Ministry of Petroleum Resources over its [ministry’s] continued failure to grant the oil company the needed consent to operate Oil Prospecting Lease 310, despite the billions of naira worth of investments that have already made on the facility.
The oil company originally owned a 17.14% participating interest in OPL 310. But in 2015, it acquired an additional 22.86 interest which was previously held by Afren Plc. This would normally combine to give the company a 40% participating stake in the venture. But the acquisition from Afren Plc is yet to be consented to by the Ministry of Petroleum Resources.
It is therefore due to this lack of consent, and the absence of a satisfactory explanation from the ministry as to why said consent has not been given, that the company has filed a suit before the Federal High Court “for a declaration that is expected to expedite the consent process and preserve the unexpired tenure in the licence.”
On 31 July 2015, Afrenplc, the parent company of Afren Oil & Gas that held interests in the OPL 310 licence, was put into administration and its assets put up for sale. On 1 December 2015, LEKOIL announced an agreement with the administrator of Afren and Afren Nigeria Holding Limited to acquire the shares of AIOGNL, which held a 22.86 percent participating interest in OPL 310. This interest was also subject to Ministerial Consent from the Minister of Petroleum Resources. The acquisition meant that LEKOIL would hold a consolidated participating interest of 40 percent and an economic interest of 70 percent in OPL310 and would become the technical and financial partner of Optimum Petroleum Development Company, the operator and local partner in OPL310, which retains a 60 percent participating interest. -LEKOIL Limited
There has so far been no reaction from the Federal Ministry of Petroleum Resources regarding this suit.
Oil Prospecting Lease (OPL) 310 is an offshore license. It is said to encompass the Ogo oil well located in shallow water offshore Lagos and has a considerable amount of oil deposit.
Lekoil Limited is an oil and gas company with presence in over four countries, including the USA, Cayman Island, and Nigeria. It was incorporated in 2010, and it has a market share price of £16.98 as at March 4th, 2018.
