Page 4 - AfrOil Week 33 2019

AfrOil COMMENTARY AfrOil
Abuja blasts SPDC’s bid
to retain OML 11 operatorship
The onshore block will remain a source of strife, no matter which side wins the suit now being heard in the Federal High Court
WHAT:
Nigerian federal authorities continue to make the case for their revocation of SPDC’s position as operator of OML 11.
WHY:
Environmental, political and nancial grievances are likely to bedevil any and all parties seeking to work at the block.
WHAT NEXT:
The outcome of the court case could affect Shell’s plans to develop Bonga South West.
NIGERIA’S federal government has signalled that it will continue to battle Royal Dutch Shell’s attempt to regain its position as operator of Oil Mining Lease 11 (OML 11), which lies in the south-eastern Niger River Delta. Shell leads a consortium that holds a 45% stake in the block, which contains 33 oil and gas elds. OML 11 straddles the border between the Rivers and Imo states and encompasses an area that separatist groups and local activists call Ogoniland.
At a hearing in the Abuja Division of Nige- ria’s Federal High Court on August 15, the state’s chief counsel, Mohammed Diri, called for dis- missal of the suit led by Shell Petroleum Devel- opment Corp. (SPDC), the consortium formed by Shell, Eni (Italy) and Total (France) to oper- ate OML 11 in 1979. SPDC’s request that court compel the government to reinstate its operating licence for the block poses a threat to national security, he argued.
Diri explained that federal authorities had decided against renewing the company’s operat- ing licence in June of this year because it wanted to prevent security breaches and forestall an escalation of existing tensions in the area. He asserted that the federal government had the right to take this pre-emptive action because
its primary duty was to guarantee the lives and property of its citizens.
The chief counsel also asked the court to dismiss the suit on technical grounds. He noted that SPDC had asked the court to force the gov- ernment to reinstate its control over a block that covered 3,095.25 square km. Since Nigeria’s current legal regime restricts the size of contract areas with the OML designation to 1,295 square km, he said, the Shell subsidiary is e ectively asking the state to contravene its own laws.
What next?
ese arguments are hardly the last word on the matter. Diri was not making a statement of pol- icy, but rather arguing the government’s case in the Federal High Court.
And in turn, the court has yet to issue any rulings, as it will have to take time to consider
the facts raised in the revised a davit that SPDC submitted recently. Additionally, it will probably
have to give the government time to respond to
the a davit – and to SPDC’s response to its own counter-claims. (Funke Adekoya, Shell subsidi-
ary’s counsel, stated on August 15 that these doc- uments had been served on the government, but
Diri said he had not seen them.) 
Federal High Court
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w w w . N E W S B A S E . c o m Week 33 20•August•2019