NNPC which is the Nigerian National Petroleum Corporation with some of the world’s biggest oil companies has signed a deal 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 news was disclosed in a statement that was issued by NNPC and signed in Abuja on Tuesday by Dr. Kennie Obateru the Group General Manager, Group Public Affairs Division.
Dr. Kennie Obateru said that the 5 agreements signed include, Dispute Settlement Agreement, Settlement Agreement, Historical Gas Agreement, Escrow Agreement, and Renewed PSC Agreement.
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 signaled 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
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, said Kyari.
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.’’
He also mentioned that over $780 million in immediate revenues would be earned by the Federal Government in this new deal, which 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.’’
What the Production Sharing Contract Partners are saying
Mr. Osagie Osunbor, Country Chair of Shell Companies in Nigeria, commented on the event, saying that the OML 118 renewal deal would be a watershed moment in Nigeria’s deep-water investment history and that the major step would further boost investor confidence in the country.
Mr. Bayo Ojulari, SNEPCo’s Managing Director, said the agreements represented the conclusion of a 12-year dispute that had harmed business ties and harmed confidence and investment.
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 setting, the Managing Directors of Total, Mike Sangster, Exxonmobil, Richard Laing, and NAOC, Roberto Danielle, praised Kyari for his leadership in resolving the disagreements and ensuring that the agreements would encourage greater investment into Nigeria’s oil and gas industry.
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