The Nigerian National Petroleum Corporation (NNPC) has signed a deal with some of the world’s biggest oil companies that could unlock over $10 billion investment in an offshore oilfield.
The corporation and its Production Sharing Contract (PSC) partners namely Shell Nigeria Exploration and Production Company (SNEPCo), Total Exploration and Production Nigeria Limited (TEPNG), Esso Exploration. and Production Nigeria Limited (EEPNL), and Nigerian Agip Exploration (NAE) have executed agreements to renew Oil Mining Lease (OML) 118 for another 20 years.
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This disclosure is contained in a statement that was issued by NNPC and signed by its Group General Manager, Group Public Affairs Division, Dr. Kennie Obateru, in Abuja on Tuesday.
Obateru said that the 5 agreements signed include, Dispute Settlement Agreement, Settlement Agreement, Historical Gas Agreement, Escrow Agreement, and Renewed PSC Agreement.
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He quoted the Group Managing Director of the Corporation, Malam Mele Kyari, as saying that over $10 billion dollars of investment would be unlocked as a result of the agreements adding that this signalled the end of the long-standing disputes over the interpretation of the fiscal terms of the Production Sharing Contracts (PSC) and the emplacement of a clear and fair framework for the development of the huge deep-water assets in Nigeria.
What the Group Managing Director of NNPC is saying
Kyari noted that the signing of this agreement is an indication of a renewed confidence between NNPC and her partners; the Government and the investing communities which include NNPC.
He said, “It produces value for all of us by providing a clear line of sight for investment in the Bonga bloc of around 10 billion dollars.’’
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He disclosed that the Federal Government would earn over $780 million in immediate revenues in this new deal, while it would also free the parties from over $9 billion in contingent liabilities adding that this would be of tremendous value to the Federal Government and its partners.
Going further, he said, “Ultimately, these agreements will engender growth in our country where investment will come in for other assets, not just in the deep-water, but even for new investors. It is an opportunity for them to see that this country is ready for business.’’
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What the Production Sharing Contract Partners are saying
Speaking on the development, the Country Chair of Shell Companies in Nigeria, Mr. Osagie Osunbor, said the OML 118 renewal agreement would remain a watershed in the history of deep-water investments in Nigeria and assured that the giant stride would further bolster investor confidence in the country.
Also, the Managing Director of SNEPCo, Mr. Bayo Ojulari, noted that the agreements marked the end of a 12-year dispute that had marred business relationships and affected trust and investment.
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Ojulari said, “Today, we have signed agreements that define the future of deep-water for Nigeria. This is the first deep-water block that was developed in Nigeria and it is also the first one that we are resolving all the disputes that will lay the foundation for the resolution of other PSCs.’’
In the same vein, the Managing Directors of Total, Mike Sangster, Exxonmobil, Richard Laing, and NAOC, Roberto Danielle, were full of praises for Kyari, for providing leadership which engendered the resolution of the disputes, assuring that the agreements would attract more investments into the Nigerian Oil and Gas Industry.
