By Emeka Nze
Seven oil blocks belonging to six oil companies have been revoked due to outstanding royalty payment to which the companies have consistently defaulted, despite grace period extended to them for payment by the Federal Government. The companies include Pan Ocean Oil Corporation, a joint venture company with the Nigerian National Petroleum Corporation (NNPC) whose Oil Mining Lease (OML) 98 was affected.
The other five companies affected were Allied Energy Plc with OMLs 120 & 121, Express Petroleum and Gas Company with OML 108, Cavendish Petroleum Nigeria Limited with OML 110, Summit Oil International Limited with Oil Prospecting Licence (OPL) 206, and Emerald Oil Incorporation with OML 141.
In a letter from the Minister of State for Petroleum, Dr. Emmanuel Ibe Kachikwu to the Director, Department of Petroleum Resources (DPR), the DPR was directed to inform the affected companies of the revocation of their oil leases/licences.
Kachikwu who had not hidden his disdain on the defaulting oil companies had said in a previous forum that some companies have failed to pay due royalties to government despite enjoying several grace period ranging between 30 to 90 days.
The minister said “a situation whereby we write to oil companies to pay up royalties, and for 90 days they are unable to comply. What that simply says is that they are not ready for business and we cannot continue to wait for such companies. We must move on.”
It is anticipated that this revocation will prompt other oil companies to pay their royalties as and when due, resulting in increased oil revenue for government.