LAGOS, Nigeria and LONDON – The Supreme Court of Nigeria has ruled in favor of Seplat Petroleum Development Co. Plc and Chevron Nigeria Ltd. (CNL) in a suit brought against them by Brittania-U Nigeria Ltd.
The litigation had prevented the full transfer to Seplat of a 40% working interest in OML 53, located onshore in the northeastern Niger Delta, and effective 22.5% working interest in OML 55 (held through 56.25% ownership of the share capital of Belemaoil Producing Ltd. that the company had acquired from Chevron in February 2015. OML 55 comprises an area of around 840 sq km (324 sq mi) and is located in the shallow-water offshore area in the southeastern Niger Delta. The block contains five producing fields: Robertkiri, Inda, Belema North, Idama, and Jokka.
The Supreme Court ruling allows CNL to conclude the full transfer and operatorship of these assets to Seplat with immediate effect.
Austin Avuru, CEO of Seplat, said: “We are naturally very pleased with today’s ruling, not least because it means we are now free to deploy our proven operating expertise to realize the significant reserve, production, and value potential these blocks hold… we estimate these blocks to hold recoverable volumes of around 200 MMboe net to Seplat, a material volume by any standard and one which has now been unlocked for us.
“OML 53 fits neatly within our strategy of securing, commercializing, and monetizing natural gas in the Niger Delta to supply the rapidly growing domestic market and will further reinforce our position as a preeminent supplier of gas in Nigeria. OML 55 provides us with a number of attractive opportunities to boost oil and gas output, and is consistent with our strategy of prioritizing assets that offer near-term production growth, cash-flow and reserve replacement potential in the onshore and shallow-water offshore areas of Nigeria.”
On Feb. 5, 2015, Seplat announced that it had acquired a 40% working interest in OML 53 from CNL. Simultaneously, the company announced that it had concluded negotiations to purchase 56.25% of the share capital of Belemaoil Producing Ltd., a Nigerian special purpose vehicle that had completed the acquisition of a 40% interest in the producing OML 55, also from CNL. Seplat’s effective working interest in OML 55 as a result of the acquisition is 22.50%.
NNPC holds the remaining 60% interest in both OML 53 and OML 55 and, pursuant to the joint operating model, Seplat was designated operator of both licenses.
However, the full completion and transfer of these assets and operatorship was hindered by a litigation brought against CNL and Seplat by Brittania-U, one of the counter bidders that also sought to acquire the assets from CNL and contested the outcome of the sales process.