No Lifting From Lagos Oil Field in Q2 – Report

oil fieldAn oil field in the Niger Delta
  • No Lifting From Lagos Oil Field in Q2 – Report

One of the joint venture partners in Aje field, offshore Lagos, said there was no oil lifting from the field in the second quarter of this year.

Panoro Energy said in its half year and second quarter reports 2017 that its oil and gas revenue in the period was zero, compared to the $1.3m it generated in the first quarter from the sale of its net entitlement of 26,210 barrels.

It said costs attributed to operations were $0.2m at Aje for the second quarter compared to the company’s estimated costs of $2.5m in the previous quarter.

Panoro, which has been in disagreement with its joint venture partners since late last year, said it “is in discussion with potential buyers for the sale of all or a portion of its interest in the OML 113.”

It, however, said there could be no assurances that any transaction contemplated under the discussion would be consummated.

“Panoro will bring the case to arbitration should no commercial solution be forthcoming. The arbitration is scheduled for the first quarter of 2018.”

The company noted that it had been excluded from some Aje JV information due to the ongoing legal dispute.

It said, “Following the re-entry of the Aje-5 well during Q1 2017 during which two side-tracks were drilled, we understand that the Aje-5 well was put back on stream. Production from the Aje field has continued from the Aje-4 and Aje-5 wells. A lifting of Aje crude was completed in early July, 2017.

“We also understand that material opex reductions are being implemented. Meanwhile, the JV continues to work on and refine detailed plans for the Turonian gas project, which aims to commercialise the approximately 163 Mmboe Turonian gas resources.”

Panoro noted that its subsidiary, Pan Petroleum, had been granted an order by the Federal High Court of Nigeria, restraining the non-defaulting joint venture partners from exercising any purported rights under the default provisions of the Joint Operating Agreement.

Under the JOA, the potential consequence of a JV partner not making payment of its share of a cash call on or before the expiry of the 45-day grace period is that two or more of the other partners, who are not themselves in default and who represent a majority of the interests not in default, have the option to require the defaulting party to withdraw from the OML 113 and the JOA by issuing a notice of withdrawal.

It said, “Pan Petroleum’s current view is that any withdrawal notice would constitute a penalty under the laws of Nigeria and be unenforceable as a matter of public policy.

“Should Pan Petroleum in the future be issued with a withdrawal notice, it will vigorously dispute its forced withdrawal from the OML 113 and the JOA, and will explore all legal and diplomatic avenues to ensure that the notice is withdrawn or the withdrawal is held to be unenforceable.”

About the Author

Samed Olukoya
Samed Olukoya is the CEO/Founder of investorsking.com, a digital business media, with over 10 years' experience as a foreign exchange research analyst and trader. A graduate of University of East London, U.K. and a vivid financial markets analyst.

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