Redefining Corporate-community Relations in Oil Production Operations
In line with its corporate philosophy of shared prosperity and peaceful relationship with partners, current owner and operator of the Petroleum Prospecting Licence 259 otherwise known as the Dawes Island Field, Petralon 54 Limited recently engaged with its host community, where they reached a pact that would lead to a peaceful atmosphere for the development of the oil field and attendant value for the community people, Peter Uzoho reports.
In Nigeria’s over 60 years of oil exploration and production in the Niger Delta, one common feature, which has contributed to the challenges being experienced by oil companies is the hostility of oil communities leading to attacks on oil assets. This later graduated to the stealing of crude oil and engaging in illegal refining with the setting up of artisanal refineries in creeks and forests.
However, all these are being meted out by oil communities to companies operating in their areas in response to perceived neglect, marginalisation, destruction of their environment and sources of livelihood as well as massive underdevelopment of the oil producing communities despite the fact that the resources are being exploited from their domain.
Such kind of neglect, which obviously stems from poor community relations and development plans and programmes by the operating companies has no doubt snowballed into the withdrawal of community support to companies, thus diminishing the privilege of having first line information of what happens in the oil locations from them.
Oil theft has hit the roof in recent months, leading to production dropping to an all-time low of under one million barrels per day in August 2022, against the Organisation of Petroleum Exporting Countries’s (OPEC) approved quota of 1.8 million barrels for Nigeria for the month. This is partly because communities have withdrawn their support to companies in terms helping to guard the assets and to provide information that could lead to unmasking the culprits.
It is believed that if there was robust engagement and partnership with the communities, where they see oil companies as those that mean well for them, they would be willing to become the first line guards of the oil assets and would readily inform their good partners and corporate citizens whenever there is illegal activity going on at the oil locations.
Petralon Changes the Status Quo
Having realised the importance of host communities to the success of its operation, Petralon 54 Limited, one of Nigeria’s forward-looking indigenous oil exploration and production companies and current holder and operator of the Petroleum Prospecting Licence (PPL) 259, recently engaged with the Dawes Island community.
Warmly received at the community launch held at the Ogoloma Town Square, by the three communities that make up the Dawes Island Field host community -Ogoloma, Okochiri and Konuju, all in Okrika Local Government Area of Rivers State, the Petralon delegation led by the Founder and Chief Executive Officer of the company, Mr. Ahonsi Unuigbe, rolled out its charter of cooperation and collaboration with the communities.
The company at the event, presented a copy of its license award to the leaders of the communities as a symbol of formal notification of the company’s entrance, existence and operation in their domain.
Petralon and its host reached a pact on how to achieved a peaceful atmosphere that would lead to the development of the oil asset to production, with the company briefing them about the progress made so far and what it has in stock for them in terms improving the lives of the people of the community.
The company has revealed some of its strategic initiatives to enable seamless operations at Dawes Island and restart production to raise national output.
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It has also actioned several technical and operational initiatives, including surface well head checks and first line maintenance of the existing well head, refurbishment/reinforcement of field location infrastructure, mobilization of early well test equipment and all required field operations support facilities. Upon completion, these projects will ensure a safe resumption of production activities at Dawes Island.
ABOUT DAWES ISLAND FIELD
The Dawes Island Field, which was previously designated as a field now operated under the PPL 259, in accordance with the PIA 2021 is located in the Eastern Niger Delta within an area formerly delineated as Oil Mining Lease (OML) 54, operated by Chevron as part of the NNPC/Chevron Nigeria Joint Venture. OML 54 was eventually re-offered as Oil Prospecting Licence (OPL) 2006 during the 2007 Licensing Round.
The field lies in predominantly swamp terrain, with a water depth of around 4 metres and about 15km South-west of Port Harcourt, 7 kilometres west of the Onne Free Trade Zone, and 35km north of the Bonny Terminal. It is administratively located within Rivers State and covers an area of 40 km2.
Chevron had estimated recoverable reserves and resources at up to 19.5 million barrels.
From 2014 to 2020 Petralon 54 Limited invested over $25 million on the drilling program and development initiatives on the field.
Petralon 54 Limited was notified of the award of a 100 per cent interest in the field in 2021 by the now defunct Department of Petroleum Resources (DPR) following its payment of the required signature bonus to the federal government.
However, in June 2022, and in line with changes to the license holding structure enshrined in the PIA for previously designated fields, Petralon 54 was granted a 100 per cent interest in the PPL 259, which covers the Dawes Island Field area.
As the new operator of the field, Petralon has commenced operations with a focus on restarting full production in the coming months to achieve collective value for all stakeholders.
It is working actively with its host and impacted communities to ensure production from the field is sustained with their active participation, as the youths in the communities will be engaged in gainful employment, bringing well deserved prosperity to the community.
The company has also initiated a wide range of technical activities such as a first line maintenance of the well head, refurbishment/reinforcement of the field location infrastructure and the mobilization of early well test equipment’s.
ACTIVATING MUTUAL AGREEMENT/DEVELOPMENT PLANS
During the host community launch, Petralon 54 and its host communities reached a pact that would lead to a peaceful atmosphere for the development of the field to production.
The company rolled out its robust plans for the community including job creation, capacity building, infrastructure development among other benefits, promising to be a model that operating companies would copy in terms good community relations.
Unuigbe said the company was fully back to commence work on the field after 11 years of inactivity, adding that they have started preliminary tests to fix the oil well in a bid to commence production, adding that when it starts production, part of the proceeds from the asset would be used for the development of the communities in addition to creating jobs for the teeming unemployed youth of the communities.
Unuigbe said: “It is our hope that as we are ending this year, we will finish the well with preparation, with planning to commence proper operations next year. And as we are commencing operations, every barrel of oil we produce, we are setting money aside for this community.
“Just like every other place in Nigeria, the population of this community is dominated by youths under 35. Sixty-five per cent of this community is under 35. So, there is high unemployment in this community as there is in this state and the country.
“We will address that by finding projects that offer trainings and employment opportunities so that youths of this community will grow up one day and start companies bigger than Petralon 54, own their oil projects, farms, banks, and everything because we want a better future for our new generation.
“I’m heartened that after several years of a lot of challenges I’m able to stand before you today with such festivity, colorfulness, beautiful displays, celebration of this reach culture in front of our esteemed royal fathers to formally present the award of this licence from the federal government to Petralon 54 Limited,” Unuigbe said while addressing the communities.”
He said the journey had been challenging and that the company had suffered a lot of setbacks having made its first entry into the community in 2014 to meet the royal fathers and intimate them about his aspirations and vision for the community, for the field and what he intended to do in Dawes Island.
He explained that the company was part of a group that was initially awarded the field and had tried to develop the asset and ran into challenges from the former partners, who didn’t not share the same vision that as the company shared.
That he said, forced the company to pull back, as a peace-loving people, whose corporate philosophy is not one of disagreements or arguments but that of joint prosperity, and that led to a complete slowdown of activities towards the development of the field.
According to him, the former owners got the licence in 2003 and as at 2014 when Petralon 54 came in after 11 years, nothing had happened and that led to the revocation of the licence.
But in 2020, Unuigbe explained that the federal government awarded the licence 100 per cent to Petralon 54 Limited and the company followed with the completion of all necessary agreement with the government.
“In June of this year, PPL 259, which represents the Dawes Island licence was formally presented to Petralon 54 Limited by the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) led by Engr. Gbenga Komolafe, and that put paid to any doubt or dispute about the ownership of the licence.
“And it was from that stage that we now gathered to commence and try to do some work, come back to the asset, look at the condition of the field, condition of operation, condition of the community and we met everything completely abandoned and not in a good state”, the Petralon 54 CEO narrated.
In two months, he said they managed to start operations slowly and started preliminary tests to fix the well to enable them commence production.
“If we commence production, we will use that development in partnership with Petralon 54 and the communities in this local government and there will be prosperity for both parties.
“We will all progress together and that’s the policy, that’s what we stand for as our corporate philosophy,” he promised the community.
He said the federal government had stood steadfast with the company including the regulators, NUPRC, the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) and the security agencies like the Nigerian Navy, which had given them naval support and cover.
While thanking the people of the Dawes Island community, particularly their traditional rulers and Council chiefs, for their support and encouragement over the years, Unuigbe promised that “Even if we are fortunate enough to win a bigger block somewhere else, we are committed to this community, this project because it is the first project our company started with.
“So, it is the dearest to us and we are going to be here to find joint prosperity and development of this community and it starts with the award of the licence and commencement of operation.
“And then with the investment and preparation of the community projects to be housed in this community in a location to be decided by our host and the Amanyanabos, to tell us the needs of their people: what the needs are, where it should be situated and what you will want us to do and we will make it so as long as we are in operation in this community and producing.”
COMMUNITIES PROMISE SUPPORT TO FIRM
In his remarks, the Amanyanabo of Okochiri Community and ex-Niger Delta freedom fighter, King Ateke Tom, who spoke through his spokesman, Dr Chris Biriowu, expressed his delight to witness the presentation of the licence to them as displayed by the founder of Petralon 54.
“He (the king) is assuring Petralon that the Niger Delta is already liberated and therefore, the community issues that other organisations normally display in other regions will not happen in your area of operation.
“This is because our people as represented here by three powerful and strong kingdoms: the Okochiri Kingdom, the Ogoloma Kingdom and the Konuju Kingdom are solidly behind you,” Biriowu said.
However, he cautioned the company to be wary of those indicators of community-company conflict, saying one of them was employment and employability, advising that the company’s human resource and public relations function should handle employment and employability of community youth very well.
Assuring Petralon 54 of better peaceful operations, Biriowu demanded that the company must consider people of the community during contracts awards, especially the less sophisticated ones.
“The third is infrastructure. As you are aware, when there is degradation of environment from your operations, your host communities are the first that it will impact, and therefore, if there are benefits in terms of infrastructure, they should also benefit it first before it is extended to others.
“So, you are also enjoined by the king to ensure that when the good days comes, when you are in full operation, infrastructural development should be a key action area from your organization. So, this three key areas, the Majesty is reiterating his delights and happiness that your company has come to stay,” he added.
