Stakeholders in the oil and gas industry are urging the Federal Government to constitute a technical committee to look into the face off between Anambra and Kogi states, over the ownership of oil wells located on Oil Prospecting Licence OPL 915 in the Anambra Basin.
However, the Department of Petroleum Resources (DPR) it is understood, would make a clarification on the issue very soon, to douse tensions over the ownership of the wells.
A senior industry source told BusinessDay that it was the responsibility of the National Boundary Commission to look at the issues and state clearly, the location of the wells and in which state territory they belong.
Seye Fadahunsi, director Pillar Oil, said that there should be no controversy because the locations of the wells are clearly demarcated.
Fadahunsi added that the Anambra oil well 1,2,3 being operated by Orient Petroleum Resources, though located on Oil Prospecting Lease OPL 915 which both Kogi and Anambra share , substantially falls inside Anambra state’s territory. The area is geologically regarded as Anambra Basin, he said.
He however stated that if further subsurface activities were carried out on the field and it was discovered that many of the pool of reserves extended to the Kogi area, then there could be an amicable arrangement on how to share the resources.
Another industry source told BusinessDay that until there is subsurface mapping of the field, nobody could really lay claim to the wells. He said it was possible that the reserve could spread to the Kogi area of the field, which is about 50 percent of the OPL 915. Subsurface data interpretation he said, would lay to rest any claim on that area.
Austin Avuru, managing director of Platform Petroleum Limited, said all those laying claims to the field were acting in ignorance. He asked, “are they fighting over the field or the wells?.
“Everybody is talking out of ignorance. It is the fields that people are fighting for. There is no point doing that”.
He said it was good to test a well but that those others things that give a field a production status, such as flow stations , evacuation pipelines to the terminals may not be available.
However, the Deputy Governor of Kogi State, Yomi Awoniyi has urged the Federal Government to release all the reports of the Boundary Commission, as this would put to rest, claims and counter claims over the issue, by various communities in the area.
Geographically, the Anambra Basin literally sits on top (north) of the Niger Delta and like the Niger Delta, cuts across several states, including Anambra,Benue, Delta, Edo, Enugu and Kogi. The basin, also like the Niger Delta, has been divided into blocks and awarded to various companies with work commitments enshrined in the various agreements signed. That of OPRL is a Sole-Risk Agreement with a commitment to build a refinery.
OPL 915 lies across the states of Anambra, Edo, Enugu and Kogi, with about 50 percent of the block in Kogi, while the remaining states share the other 50 percent. There are four wells drilled on the block by Elf Petroleum – Anambra River-1 in 1967, Anambra River-2 and 3 drilled later in 1984. The company in 1985 drilled Oda River-1. The three Anambra River wells are located in the Anambra State part of the block, while Oda River-1 was drilled in Kogi State. No wells have been drilled in the territories of Edo or Enugu States.
OPL 916, on the other hand, is located immediately south of OPL 915 and covers Anambra, Edo, Delta and Kogi states, with about 80 percent of the block in Anambra State. Like OPL 915, the block has four wells drilled – Nzam-1 (1954) and Alo-1 (1976) both by Shell, while Elf drilled both Okpo-1 and Iji-1 in 1985. According to reports, Alo-1 found gas, while others have ‘dry’ reported as their current status. All wells except Iji-1 are located inside Anambra State. Iji-1 is in Delta State.
The present controversy is caused by the attraction of the 13 percent derivation fund that will start accruing to Anambra State as an oil and gas producing state. If the Anambra River field is entirely situated inside the territory of Anambra State (and this can only be revealed by the seismic data currently being acquired, and new wells that will follow), then all of the benefits will go to the state. On the other hand, if it extends across the state’s boundary, then some aggregation of reserves on both sides will be used as basis to determine what belongs to each state.
It is therefore not surprising that Kogi and Enugu states have started laying claim to the resources in OPLs 915 and 916.
The director of the Department of Petroleum Resources said there was no need for the controversy generated over the Anambra River oil wells. Speaking to BusinessDay, Osten Olorunisola said the wells in question were not new wells, as they were drilled in 1969 by ELF, and abandoned. Olorunisola said out of the three wells that were drilled, only one was producing.