The firm chosen as preferred bidder for the Oil Mining Lease (OML) 25 in 2014 for $453 million, Crestar Energy, a James Bay Resources subsidiary, has now lost all rights to the permit, prompting Shell to begin sales of the block all over again.
A few months ago, Shell quietly regained control of the 45% stake it held alongside Total and ENI on OML 25.
The Anglo-Dutch major, The Capital reported on Wednesday, is happy to wait for an opportune moment to sell the asset once oil prices resemble early-2014 levels.
“In the meantime, Shell’s VP for business development Africa, Martin Foley, will handle operations at OML 25 and its potential sale once the conditions are right,” the agency reported quoting sources.
Spokesperson for Shell in Nigeria did not response to mail sent for clarification on this as at press time.
Several groups are, however, reported to have shown interest in the oil block but their offers are well below Crestar’s 2014 bidding price.
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Crestar’s winning bid in 2014 was undermind by the Nigerian junior’s then chairman, the former head of the Directorate of Petroleum (DPR), Osten Olorunsola.
Ousted from the DPR by the Nigerian minister of petroleum resources Diezani Alison-Madueke, Olorunsola quickly become the ministry’s bugbear, and his presence at the head of Crestar cause the OML 25 sale to fall through as the NNPC opted to exercise its right of re-emption. The state-owned firm however was not able to fork out a single cent to execute this right.
Crestar’s already compromised purchase of OML 25 was fatally scuppered by the conflict triggered between the Nigerian junior and its partner Seplat.
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The latter, which had teamed up with Crestar to purchase the block, is headed by Ambrosie Bryant Chukwueloka ‘ABC’ Orjiako, a close friend of Nigeria’s current secretary of state for oil Emmanuel Ibe Kachikwu.
By January 2017 their relations had soured and a legal dispute was brought before the High Court of London over a $20.5 million deposit made into an escrow account for the purchase of the block. The dispute was finally settled in April 2018 with the money split between Crestar and Seplat.
