People & Money

NNPC, Sterling Global Ink Deal for OML 143 Monetisation

The Nigerian National Petroleum Corporation (NNPC) Friday said it had signed a pact with Sterling Global for monetisation of Oil Mining Lease (OML) 143.

‘’This latest development will help increase NNPC’s footprints in the downstream gas market and a potential revenue of $500-600 million to Nigeria,’’ the state-owned corporation said in a Twitter post.

An OML monetisation contract enables a firm to proceed with developing and monetising new findings with available details of production. The company has the liberty to do necessary paperwork and documentation – appraisal, developmental plan and others thereafter.

The contracts offer licenses to Sterling Global to immediately monetise OML 143 operations even as the details and conditions of the details are still pending.

Also Read: Gas Agreement Assessment to Attract Investments, Not to Hike Prices – GACN

Accused of an illegal mining operation in 2019, Sterling Global was directed to halt oil exploration in Ogwu Ikpele in Ogbaru, Anambra State by the House of Representatives last year. The House described Sterling’s operations as illegal and environmentally harmful.

 

In Context

 

Sterling Oil is owned by the Indian Sandesara brothers, Nitin and Chetan, who are wanted in India for money laundering and absconding with fraudulently-obtained bank loans. Their business interests in India range from operation of ports to economic zones. The Indian Central Bureau of Investigation made enquires in 2018 through Interpol to establish if they resided in Nigeria. Sterling Oil participated in the marginal fields bidding round of 2005 and won the Niger Delta oil blocs, OML 143 and OML 146 which they operate in conjunction with Nigerian partners as required by Nigerian law. Observers regard the bidding process for oil fields in Nigeria to be extensively rigged in favour of people with political power who often use “fronts” to participate in the bidding. Sterling Oil has been reported as the busiest independent oil producer in Nigeria, a market where influential people win oil blocs and fail to develop it for the lack of finances and  commercial and technical knowhow. Nigeria on June 1, 2020 launched its first marginal field bidding round since 2003 with a total of 57 fields on offer. The bidding round will close in December,2020.

 

 

Mele Kyari, the NNPC group managing director, signed the deal on behalf of the firm, while Tony Chukwueke, Chairman of Sterling Oil Exploration and Energy Production Company Limited (SEEPCO) signed for his company.

SEEEPO currently produces the Okwuibome Blend of crude oil, which is popular in North America, France, Italy, United Kingdom, Australia, South Africa and places in Asia because of its low sulphur and sweet crude mix.

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