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Shell’s OML 11: FG ordered to renew licence for 20 years

The Minister of Petroleum has been instructed by the Federal High Court in Abuja to grant the renewal of the Oil Mineral Lease (OML) 11 licence to Shell Petroleum Development Company of Nigeria. 

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Shell OML 11, Shell joins market rivals, writes down $2.3 billion as US-China trade war bite 

The Minister of Petroleum Resources has been instructed by the Federal High Court in Abuja to grant the renewal of the Oil Mineral Lease (OML) 11 licence to Shell Petroleum Development Company of Nigeria. 

The renewal is expected to last for 20 years as against the 30 years requested by the company, according to Justice Taiwo Taiwo. 

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The case with suit number CS/524/19 was instituted against the Minister of Petroleum Resources, President Muhammadu Buhari and the Minister of State for Petroleum Resources, Timipre Silva to seek the intervention of the court over the controversy surrounding the OML 11.

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What you should know: The Petroleum Act of 1969 (as amended) empowers the Minister of Petroleum to grant or revoke the exploration, prospecting and production rights of the operating companies. The Minister of Petroleum Resources, President Muhammadu Buhari tried to revoke Shell’s license in a bid to solve the protracted disputes between the people of Ogoniland and Shell over oil exploration of their land.

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The Minister of Petroleum Resources, who is also President Muhammadu Buhari, was the 1st defendant while the 2nd defendant was the Minister of State for Petroleum Resources, Timipre Sylva.

Claims: Shell Petroleum Development Company (SDPC) wanted to force the Ministry to renew OML 11, as well as 14 other oil mining leases that were approved for it on June 30.

The Federal Government, however, explained that its decision not to renew the operating license was in the best interest of the nation’s security.

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[READ ALSO: FRAUD: FG threatens to extradite accused Nigerians]

The Counsel to the FG, Mohammed Diri, defended the government, saying that government’s role was to guarantee the safety of lives and properties and refusal to renew OML 11 was one of those ways to prevent any escalation of a security breach in Ogoniland.

OML 11 covers an area of 3,095.25 square kilometres that stretch between Rivers and Imo with 14 oilfields, 10 out of which are located in Ogoni area of Rivers.

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SPDC went out of its way to compel the government to commit an illegality because an approval by the Minister of State for Petroleum of “a single oil block size of 3, 095.25 is tantamount to facilitating illegality which contravenes the Drilling and Production Regulation that restricts the size of an OML block to 1.295 square kilometres (500 miles),” Diri argued.

He asked the judge to dismiss the case since SPDC’s suit was devoid of merit and had no strong claims.

Justice Taiwo noted that the provision of the law makes it mandatory for the Minister of Petroleum to grant a renewal of a license if an applicant met all the conditions.

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My understanding of paragraph 13 (1) of the first schedule to the Petroleum Act states that it is mandatory for the minister to grant a renewal if all the conditions have been met,” he said.

The judge held that there was no evidence before him to prove that the plaintiff had not met with the conditions stated in the provision.

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I see no conflict in these two paragraphs. I am of the view that what these paragraphs say is that a term of a mining lease shall not exceed 20 years,” he added.

He also said the Drilling and Production Regulation cannot be upgraded to the position of the Petroleum Act and the issue that the defendant cannot grant more than 1, 295 square meters as the case with the total area covered by the OML 11 which had been in existence before the regulation came into being.

I, therefore, find that having fulfilled all obligations required for the renewal of Oil Mining Lease 11, including the payment of rent and royalties and having applied for the renewal of the lease in line with the law, the plaintiff should be granted the renewal.

I hereby order that the defendants are hereby compelled to grant the application for the OML 11 but it shall be in accordance with Paragraph 10 of the first schedule to the Petroleum Act as regards the number of years stated therein and that there shall be no reduction in size of OML 11 as being contemplated by the defendants,” Justice Taiwo ruled.

The backstory: In March 2019, the Nigerian Government directed the Nigerian National Petroleum Commission (NNPC) to take over the entire OML 11 from Shell Petroleum Development Company.

[READ FURTHER: Why Google disabled more than 200 YouTube channels]

This was contained in a letter titled ‘Operatorship of Entire Oil Mining Lease 11′. OML 11 in Ogoniland is one of the most important blocks in Nigeria with 33 oil and gas fields including Bodo, Bodo West and Yorla fields.

The oil blocks have caused protracted disputes between the people of Ogoniland and Shell over the degradation of their environment by the oil giant.

The local arm of Shell, SPDC abandoned activities in the Ogoni section of the lease for about 26 years following the crisis that erupted after the killing of prominent Ogoni leaders including Ken Saro-Wiwa. In 2015, SPDC agreed to pay a settlement of $15.5 Million (N3 billion), just to resolve the case.

Patricia

Reincarnated as a lover of stocks, Angel investors, seed funds, and anything aligned to tech or startups raising money, Joseph's work at Nairametrics involves following the money to wherever it leads. Before joining Nairametrics, he won an investigative journalism fellowship with ICIR, appeared in several national dallies, with hard-hitting opinions, features and investigative pieces. He has also engaged in content marketing and copywriting for a top e-commerce firm in Nigeria.

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Hospitality & Travel

Passengers can now arrive 90 minutes before departure for domestic flights – FG

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international passengers, Coronavirus: FG enforces immediate screening of travellers at airports with new directive

The Federal Government has announced the reduction of arrival time for passengers from three hours to one hour and a half before departure for domestic flights.

This was disclosed in a tweet post by the Minister for Aviation, Hadi Sirika, through his Twitter handle on Monday, July 13, 2020.

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The minister said that the decision was arrived at after they have reviewed passenger facilitation at the airport while noting that passengers should check-in online.

In the tweet post, Sirika said, ‘’My colleagues and I have reviewed passenger facilitation at our airports, consequently I am happy to announce that, henceforth travellers are to arrive one hour and half before their departure time for domestic flights. Travellers are advised to check-in online, please.’’

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It can be recalled that the Federal Airports Authority of Nigeria (FAAN) had earlier in June issued flight resumption protocol for both international and local passengers across the country, advising passengers to arrive at the airport three hours before their time due to the new COVID-19 safety checks for domestic flight operations and five hours for international flight operations.

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Economy & Politics

Seyi Makinde Proposes N3 billion investment plan for water supply

The local governments in Oyo are advised to submit a list of 10 faulty boreholes in the LG. 

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Seyi Makinde Proposes N3 Billion plan for water supply

The Governor of Oyo State, Seyi Makinde announced the proposal of a N3 billion investment plan dedicated to water supply in rural and urban areas of the state.

Speaking through the Chairman of Rural Water Supply and Sanitation Agency (RUWASSA), Mr. Najeem Omirinde in Ibadan on Monday, he added that N500 million of the N3 billion would be used for repairing broken and faulty state-owned boreholes.

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All Chairmen of each of the Local Governments in Oyo are advised to submit a list of 10 faulty boreholes in the Local governments.

The Oyo State governor also ordered that all new boreholes must be compliant with solar-powered pumps, to enable their longevity and save costs.

Urging residents to patronize the agency if they need to dig up boreholes for water, citing that it would be cheaper if done through the state agency than with private drilling companies.

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Minister of Finance, Zainab Ahmed stated last year that Nigeria needs an estimated N36 trillion annually for the next 30 years to solve Nigeria’s infrastructure problem. The investment, although a tiny fraction of what Nigeria needs is a bold step by the Oyo State government.

 

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Economy & Politics

FG asks UK court for more time to appeal $9.6 billion arbitration judgement

Malami stated that the Evidence of P&ID’s highly orchestrated scam had only recently come to light. 

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FG asks UK court for more time to appeal $9.6 billion arbitration judgement

The Federal Government has approached a UK court to appeal for more time to appeal the $9.6 billion arbitration award against it over the breach of contract with Process & Industrial Development (P&ID) Ltd.

Nigeria has said that it needs more time to pursue its argument that the 2010 gas supply contract with Process & Industrial Development Ltd was a sham.

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The legal dispute with P&ID is coming against the backdrop of the huge drop in the country’s revenue due to the collapse in oil prices globally. Nigeria had applied to US courts in March seeking for documents from 10 banks which includes Citigroup Inc. and JPMorgan Chase & Co, in a bid to prove its corruption allegations.

P&ID, however, has denied any wrongdoing in the whole transaction, arguing that Nigeria missed its opportunity to appeal.

The Nigerian Lawyer, Mark Howard, on Monday, the first morning of a 2-day hearing, said ‘’It is very unusual in a fraud case to discover a single smoking gun. By its very nature, fraud is conducted in secret, which makes it hard to detect and justifies an extension.’

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READ MORE: The effect of the United States’ Shale Oil on Nigeria?

The legal representatives for Nigeria are seeking another hearing for the judge to decide whether any misconduct has taken place and whether it justifies overturning the contract

The Attorney General and Minister for Justice, Abubakar Malami in a statement said, ‘’Evidence of P&ID’s highly orchestrated scam had only recently come to light.’’

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It can be recalled that last year, a UK judge upheld an earlier arbitration award to P&ID, which had accumulated to about $9.6 billion. The arbitration decision was over a failed contract to build a gas processing plant in the Southern city of Calabar.

The Nigerian lawyers disclosed that they have uncovered alleged bribes to government officials and their family members dating back to 2009.

Malami in his court filing on March 24, submitted that ‘’There is good reason to believe that ministers at the highest level were involved in a corrupt scheme to steal money from Nigeria.’’

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