Shutdown of OML 25 cost Nigeria over $1.7 billion – NNPC

OML 25, Mele Kyari

A huge disagreement between three host communities: Belema, Offoin Ama and Ngeje in Akuku-Toru Local Government Area of Rivers state and Shell Petroleum Development Corporation (SPDC) caused the shutdown of Oil Mining Lease (OML) 25 flow station more than two years ago.

The Details: The disagreement was borne out of the fact that Shell is not an indigenous oil exploration firm. The host communities raged as they occupied OML 25 for over two years after insisting that only an indigenous firm would be allowed to operate therein.

The resultant factor was an accumulated loss of over $1.7 billion in revenue for Nigeria.

The decision of the three host communities to push Shell away from their community was reversed after an agreement was reached by all parties concerned.  The agreement was brokered by the Federal Government through the Federal Ministry of Petroleum and the NNPC between Shell and the host communities of the oil facility.

Meanwhile, 35,000 barrels of oil was already lost daily following the occupation of the facility.

OML 25 Reopened: The Group Managing Director of the Nigerian National Petroleum Corporation (NNPC), Mele Kyari, led the team that reopened the flow station.

OML 25, Oil

Kyari’s words: “We had a shutdown of the Belema flow station for over two years leading to the loss of over 35,000 barrels of oil per day in monitory terms that over $1.7bn which could have been put to use for the benefit of the community and the rest of the federation.

”We have engaged the communities and Shell to make sure that this dispute between them is brought to a closure, the communities have agreed to vacate the facility to allow petroleum operations to continue.”

What this means: Following the resolution of the dispute, Shell is expected to resume oil explorations after an inventory of damages would have been conducted on the facility, all through the time it was shut.

For re-entry of Shell and operations to commence, validation of the state of facility and damages done on the facility overtime would be done.  I’m sure within the shortest period of time shell will come up with their plans how it would be done.

Our first interest here is to ensure peace and security and to make sure that normal live returns to this communities so development can begin to take place,” Kyari added.

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