Eroton Denies NNPC’s OML 18 operatorship claims

In regards to the ownership of Oil Mining Lease (OML) 18 in Port Harcourt, Rivers State, Eroton Exploration and Production Company Ltd has denied allegations made by the Nigeria National Petroleum Corporation (NNPC) Limited last week.

According to an official statement from Eroton, the manner the NNPC and Sahara Field Production Limited (formerly known as OML 18 Energy Resource Limited) handled the situation violated the Joint Operating Agreement (JOA).

“In complete breach of the terms of the Joint Operating Agreement (JOA) governing OML-18, and with total disregard for due process, the non-operators of OML-18; NNPC Limited and Sahara Field Production Limited (now known as OML 18 Energy Resource Limited) appointed a company, NNPC Eighteen Operating Limited as operator of OML-18,” the statement read.

Eroton claimed that all the JOA participants were involved in the legal and contractual procedure that led to its selection as Operator of OML-18.

On March 6, 2023, NNPC issued a statement announcing that it had fired Eroton as owner of OML 18. The non-operating Joint Venture (JV) partners of Oil Mining Lease (OML) 18 have appointed NNPC Eighteen Operating Limited as the operator of OML 18 in place of Eroton Exploration and Production Limited (Eroton), the national oil company reported. This is being done to prevent further asset degradation and to restructure oil and gas production.

However, Eroton said it has approached the relevant courts to defend its legal rights and issued Notice of Arbitration to NNPC and Sahara in accordance with the terms contained in the JOA.

This is despite any contrary public statements made by any entity during the interim period, according to the exploration company. If this action by NNPC and Sahara is allowed to continue, it will endanger all JOAs in Nigeria involving both multinational and indigenous oil and gas companies because proper dispute resolution procedures have not been followed.

“Thus, there can be no removal of an operator without following the laid down procedures and processes in Article 2.4 of the JOA,” Eroton said in the statement. “The process is designed in such a way that notice requirements cannot be waived, and the removal of operatorship cannot be carried out without following the process provided in the JOA.”

The production company categorically denies any fraudulent acts, as claimed in the false report on OML-18 operations. It said in the statement that any issues that have arisen as a result of Eroton’s operation of OML-18 are strictly contractual/commercial in nature, and thus fall outside of the jurisdiction of the Economic and Financial Crimes Commission (EFCC).

“We thereby re-iterate that Eroton remains the Operator of OML-18 in line with the provisions of the JOA and any dispute whatsoever between the parties are reserved exclusively for resolution under the Dispute Resolution clause of the JOA,” Eroton said. “The actions of the other JV partners (NNPC and Sahara) remain illegal and run contrary to the rule of law and in total breach of the terms and conditions stipulated in JOA.”

According to Eroton, it remain committed as the Operator of OML-18 to transparency, integrity, and due process, and urges the public and stakeholders to disregard any misinformation as we continue to operate in compliance with all applicable laws and regulations.