Lekoil Seeks Extension Of Offshore Licence In Nigeria

Lekoil Seeks Extension Of Offshore Licence In Nigeria 

Lekoil Seeks Extension Of Offshore Licence In Nigeria

Africa-focused oil and gas company Lekoil has requested relief from enforcement of expiration of the exploration license for lease OPL 310 from the Nigerian Federal Ministry of Petroleum Resources. Lekoil holds an unconditional 17.14 percent interest and an additional 22.86 percent interest, subject to Ministerial consent, in the OPL 310 located in shallow water offshore Lagos.

OPL 310 holds the Ogo oil and gas discovery found in 2013. The company said on Monday that it requested from the Ministry an extension of the license beyond February 2019 to recover the three years and one month lost due to regulatory delays out of Lekoil’s control.

According to Lekoil, this will enable the current holders of participating interests in OPL 310 to fulfill the requirements for the conversion of OPL 310 to an oil mining license (OML).

The company added that it had “valid grounds under the relevant Petroleum Act of 1969 for being granted an extension […].”

OPL 310 transfer interest waiting since 2016

In February 2013, Mayfair Assets and Trust Limited, a subsidiary of Lekoil, farmed into Afren Investments Oil and Gas Nigeria Limited’s (AIOGNL) interest in OPL 310 for a 17.14 percent participating interest and 30 percent economic interest. Ministerial Consent was granted for the interest on June 9, 2017.

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Afren, the parent company of Afren Oil & Gas that held interests in the OPL 310 license, was put into administration and its assets put up for sale on July 31, 2015.

Lekoil agreed with the administrator of Afren to acquire the shares of AIOGNL, which held a 22.86 percent participating interest in OPL 310 on December 1, 2015. This interest was also subject to Ministerial Consent from the Minister for Petroleum Resources.

The acquisition meant that Lekoil would hold a consolidated participating interest of 40 percent and an economic interest of 70 percent in OPL310 and would become the technical and financial partner of Optimum Petroleum Development Company, the operator and local partner in OPL310 which retained a 60 percent participating interest.

An application for the transfer of the 22.86 percent interest was duly made by Afren Nigeria in January 2016. In March 2016, Lekoil was notified by the Ministry of Petroleum Resources that the necessary due diligence exercise would be conducted that month.

The due diligence exercise did not take place and has not been rescheduled by the Department of Petroleum Resources since then.

As a result, Lekoil applied to the Federal High Court last month for a declaration that was expected to expedite the consent process, and preserve the unexpired tenure in the license. It is expected that a hearing will be held on Thursday, November 29.

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