After several weeks of deliberation and brainstorming, history was made on Wednesday, 8th June, 2016 with the inauguration of the Asset Management Teams (AMT) for Oil Mining Leases (OMLs) 26 and 34 for the Nigerian Petroleum Development Company Limited (NPDC) and its Joint Venture Partners.
The inauguration which took place at the NNPC Corporate Headquarters, Abuja came after all parties agreed to amend certain provisions of the Joint Operating Agreements (JOA) to enable them to carry out Joint Operations through the AMTs for OMLs 26, 30, 34, 40 and 42.
The AMT is an offshoot of the production and enhancement workshop which the NPDC held with its joint venture partners in OML 26, 30, 34, 40 and 42 in February, 2016.
The AMT represents a new dawn for the JV partners and also fosters an atmosphere of friendship and collaboration between the parties as they agreed that the achievement of set goals will be based on synergy, especially with regards to resources management.
The Asset Management Team which comprises experts from the NPDC and its JV partners is a special purpose vehicle to enhance productivity and drive growth for all the JV assets. It is not in any way meant to replace NPDC as the operator of the assets.
The AMT became imperative following a directive by the Honourable Minister of State for Petroleum Resources Dr. Ibe Kachikwu to the NPDC to restructure its operations for improved productivity and growth.
This is also in consonance with the commitment of President Muhammadu Buhari to sanitize and restructure the Oil and Gas industry in Nigeria with a view to enhancing productivity and transparency.
During the meeting, the parties entered into a Side Letter Agreement in order to document their commitment to the Joint Operations which has been scheduled into a short, medium and long terms growth plan. The long term plan however is that the existing Unincorporated Joint Venture (UJV) will be transformed into an Incorporated Joint Venture (IJV) whereby parties shall transfer the entire participating interests to a limited liability company and become shareholders of the said company.
The agreement has been consummated by all parties involved, with an official signing of the side letter to enforce the AMT. Thereafter an emergency Operations Committee (OPCOM) meeting was held at the NPDC Head Office, Benin City separately for OMLs 26 and 34 to ratify the side letters to the AMT. The side letters clearly spelt out rules of engagement as well as the constitution of OPCOM members and organization structure for the AMTs.
The teams will first work for ninety days within which they will review their performance. The medium term growth plan will last for three years. By that time the AMTs are expected to have completed their turn around process and make way for an incorporated entity that will form the long term plan.
And to ensure that staff of the NPDC as well as the joint venture companies were not in the dark with regards to the changing order, an enlightenment session was put together on Wednesday, 15th June, 2016 to brief NPDC staff on the new developments and also secure their support ahead of the task.
However, because the AMT is not an incorporated entity, staff on the various teams will not be on secondment. Instead they will be on deployment and will be operating from Warri, Delta State. This is to encourage closeness and harmonious relationship with the host communities.
With these new plans firmly on ground and under the atmosphere of friendship, stakeholders are confident that some of the challenges that undermined the smooth operations of the JV Assets may finally be laid to rest.
Thus, the Joint Venture Partners are hopeful that the repositioning will enhance production and increase revenue for the Government and Partners. It will also boost the country’s power generation through the production of more oil and gas.