The Nigerian National Petroleum Company Limited, NNPCL has taken over business man, Onajite Okoloko's Eroton Exploration & Production Company Limi
The Nigerian National Petroleum Company Limited, NNPCL has taken over business man, Onajite Okoloko’s Eroton Exploration & Production Company Limited, operators of Oil Mining License (OML) 18, following months of inactivity caused by a multitude of issues thought to include the diversion of funds, governance infractions, and indebtedness to JV partners.
Other reasons given for the takeover were Eroton’s inability to meet contractual obligations, inability to meet work programmes, inability to deliver on its committed Field Development plan, prolonged debt to the Federal Government, and closure of office premises by the Federal Inland Revenue Services, FIRS, for over a year, among others.
A top industry source disclosed that NNPCL had secured the operatorship of the asset with the backing of the Nigerian Upstream Regulatory Commission while the Economic and Financial Crimes Commission had stepped in to investigate allegations of financial impropriety and fraud levelled against Eroton’s management.
A source confirmed that it was discovered that the NNPCL had previously commissioned a forensic audit into Eroton’s handling of OML 18 which revealed a multitude of issues including non-payment of oil royalties, mismanagement of funds, insider dealings, using JV funds for personal debt servicing, non-remittance of taxes, technical incompetence, loss of value to Joint Venture partners and zero lifting of oil since July 2021.
These findings, among others, prompted the NUPRC to refer the situation to the EFCC for further investigation.
Although there had been issues with the NCTL pipeline, Eroton is said to owe both Shell and Aiteo over $80m in outstanding levies and all the barge operators it had hired to evacuate the crude oil.
“This whole situation is quite unfortunate, especially in times like this when the government should be earning large amounts from fields like this that are capable of at least 60,000bbls p/d.
“As we speak, the Eroton office in Victoria Island, Lagos has been sealed by the Federal Inland Revenue Service over non-remittance of taxes to the government running into tens of millions of dollars. Eroton is currently bogged down by numerous court actions including winding up litigations against the company by several parties, not to mention allegations of fraud and gross financial mismanagement. It is in the best interest of the nation that the asset has been taken over by NNPCL to facilitate the seamless restoration of operations on OML 18,” the source stated.
The source further noted that the decision had been greeted by commendation by industry watchers and host communities who regarded the new development as a new lease of life considering the decrepit state of the asset under operatorship by Eroton.
“This is a step in the right direction for Nigeria and the good people of the Niger Delta that ensures OML 18 is operated in compliance with global best practices with attendant optimal and beneficial outcomes for all stakeholders,” the source added.
Located in the Eastern Niger Delta and covering a total area of 1,035 Sqkm in onshore swamp terrain, Eroton became an operator in OML 18 in 2015.
Okoloko who its chairman, is also the Chairman of Midwestern Oil and Gas Plc.
He is a founding partner of the Ocean & Oil/Oando Group and a former member of the Board of Union Bank of Nigeria Plc and the Group Chief Executive Officer and Group Managing Director of Notore Chemical Industries Plc, the only producer of Urea Fertiliser in Sub-Saharan Africa, including South Africa.
