A major rift may have emerged between the Nigerian government and its expatriate joint venture partners, particularly Chevron on an alleged illegal oil production at the Agbami oil field, approximately 220 miles south-east of Lagos and 70 miles offshore of Nigeria, in the central Niger Delta. Chevron is being accused of illegally producing crude oil of about 200,000 barrels per day (bpd) valued at more than $8Billion every month without approvals and any remittance or royalty payment to the Federal Government of Nigeria.
Only recently, Chevron announced that its affiliate, Star Deep Water Petroleum Limited, started crude oil production from the Agbami field on July 29, 2008. The $3.5bn Agbami oil field project is Nigeria’s largest deepwater development and lies in OPL Blocks 216 and 217. Development of the field has been unitized between these two blocks � ChevronTexaco is the operator, with a 68.15% interest; Statoil has an 18.85% interest (which it took in 2004) and Petrobras holds the other 13%.
Pointblanknews.com gathered that the Nigerian government has already registered its displeasure with what has been identified as the �worst illegality� in the industry by summoning its operatives at the Department of Petroleum Resources, DPR, with a marching order to bring the situation under immediate control.
In November 1999 when the Agbami oil well was spudded and it reached it total depth, it was temporarily suspended to allow for flow testing and possible production at a later date. But sources told Pointblanknews.com that Chevron secretly began operation few years later and decided to announce its operations in July 2008 when it leaked to the Nigerian Government that the U.S oil company had carried out oil production years before now in the Agbami oil field with reserves estimated at around one billion oil-equivalent barrels.
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The operation said to have taken firm roots with Chevron and other yet to be named oil prospecting companies in the country is said to have led to the lose of more than an estimated $100 Billion in accruable revenue.
Besides, Chevron is also accused of operating illegal oil fields that have no records with DPR. Recently, the Joint Task Force, JTF, discovered illegal oil refineries in Rivers State.
It was said that the affected oil companies had taken the cheap way out in order to circumvent due process, by way of relevant Government approval for the oil production in Agbami oil field.
Sources told Pointblanknews.com that the poor funding of the operations of DPR and other relevant agencies often gives room for the ineffectiveness of the agencies to monitor activities of oil companies operating in Nigeria.
At a meeting late last week in Abuja with the Minister for Petroleum, Mr. Odein Ojumogbia there was a sharp reprimand for the agencies that allowed that allowed the lapses.
Officials described the anomaly as �outright stealing by Chevron.� Although officials at DPR and National Petroleum Management Services, NAPIMS, consistently denied knowledge of, and complicity in the alleged shoddiness that permit Chevron to get with its unwholesome practices, insiders said that �heads are bound to role, because somebody has to be held accountable.�
Officials from DPR went back to Lagos after the meeting in Abuja deeply worried and wondering how such huge gaffe was overlooked in the first place. Some of them were said to be disturbed that they maybe up in the wave of disciplinary actions that may soon come.
Sources however hinted that oil companies operating in Nigeria are jittery over the current spate of crisis in the Niger Delta area that may see them moving out of the country and as such prefers engaging in outright production instead of exploration of crude oil.
However, as at press time, the presidency and officials of the petroleum ministry are studying the situation with a possible sanctioning of Chevron.
Chevron Corporation had reported net income of $6.0 billion ($2.90 per share – diluted) for the second quarter 2008, compared with $5.4 billion ($2.52 per share – diluted) in the year-ago period. Earnings in the 2007 quarter included a net gain of approximately $500 million on the sale of an investment and redemption of debt.
For the first half of 2008, net income was $11.1 billion ($5.38 per share – diluted), up 10 percent from $10.1 billion ($4.70 per share – diluted) in the first six months of 2007.
Sales and other operating revenues in the second quarter 2008 were $81 billion, compared with $54 billion in the year-ago quarter. First-half 2008 sales and other operating revenues were $146 billion, versus $101 billion in the corresponding 2007 period.