According to the NNPC, this was done in order to protect the JV investment in OML 18, the non-operating partners, NNPC Limited (55 per cent interest) and OML 18 Energy Limited (“OML 18 Energy” – 16.20 per cent interest), jointly owned 71.20 per cent equity, removed Eroton as operator of the JV.

“This is in line with the provisions of the Joint Operating Agreement (JOA)”, Chief Corporate Communications Officer, NNPC Ltd, Garbadeen Muhammad, said in a statement.

He explained that this was to curtail further degradation of the asset and revamp production of oil and gas.

“NNPC Limited and OML 18 Energy further appointed NNPC Eighteen Operating Limited as operator of the JV,” he said.

Muhammad said that the change in operatorship had been notified to the Nigerian Upstream Regulatory Commission (NUPRC) and communicated to Eroton.

He said that while the key business reasons that made the change in operatorship were compelling, it was publicly available information that production had declined from thirty thousand barrels per day to zero.

He said the persisting inability of Eroton to meet the fiscal obligations of the Federal Government led to the sealing of Eroton’s head office in Lagos by the Federal Inland Revenue Service (FIRS) for more than 12 months due to non-payment of outstanding taxes.

According to him, Eroton is also not able to remit to the JV parties the proceeds of gas supplied to its affiliate, NOTORE.

He said that a number of audits and investigations, including by the EFCC, NURPC’s work programme audit and others had been undertaken or were ongoing.

Muhammad said some of these audits were regulatory steps that may lead to licence revocation under the relevant laws if non-operating partners did not take drastic steps.

“NNPC Limited in particular, as the majority shareholder with a unique stewardship responsibility to the federation, is committed to assuring that the energy and financial security of the country is uppermost in its business decisions.

“Removing an operator in these circumstances is therefore inevitable in order to protect the JV from governmental or third parties action from entities, including Eroton’s lenders and other service providers.

“It is important to highlight that OML 18 is an oil-producing block covering 1,035 square kilometres located south of Port Harcourt and contains 11 oil and gas fields with about 714 million Stock Tank Barrels (MMSTB) of oil and condensate and 4.7 trillion cubic feet (tcf) of natural gas reserves.

“Eight fields have been developed, but only four are currently producing: Cawthorne Channel, Awoba, Akaso and Alakiri,” he said.