NNPC, SNEPCo, others sign multibillion Dollar deep-water agreements on OML 118

*The Nigerian National Petroleum Corporation says the deal would yield over $780million in immediate revenues to the Federal Government

Isola Moses | ConsumerConnect

The Nigerian National Petroleum Corporation (NNPC) and its Production Sharing Contract (PSC) partners, 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.

The five agreements the Corporation and its partners signed include Dispute Settlement Agreement, Settlement Agreement, Historical Gas Agreement, Escrow Agreement and Renewed PSC Agreement.

Dr. Kennie Obateru, Group General Manager, Group Public Affairs Division of the NNPC, who disclosed this in a statement Tuesday, May 25 noted that Malam Mele Kyari, Group Managing Director (GMD) of the Corporation, said over $10billion of investment would be unlocked as a result of the agreements.

Kyari stated that the deals 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.

This, according to the NNPC GMD, is an indication of “a renewed confidence between NNPC and her partners; between the Government and the investing communities which include NNPC. It produces value for all of us by providing a clear line of sight for investment in the Bonga bloc of around $10billion.”

Malam Kyari further disclosed that the deal would yield over $780million in immediate revenues to the Federal Government while it would also free the parties from over $9billion in contingent liabilities.

He stated: “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.”

The GMD commended President Muhammadu Buhar; Chief Timpre Sylva, Honourable Minister of State for Petroleum Resources, and the NNPC Board of Directors for enabling the state oil firm to achieve this laudable landmark.

Mr. Osagie Osunbor, Country Chair of Shell Companies in Nigeria, at the event said the OML 118 renewal agreement would remain a watershed in the history of deep-water investments in the country.

Osunbor assured the stakeholders that the giant stride would further bolster investor confidence in the country.

In a similar vein, Mr. Bayo Ojulari, Managing Director of SNEPCo, also noted that the agreements marked the end of a 12-year dispute that had marred business relationship and affected trust and investment in the industry.

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.”

The Managing Directors of Total, Mike Sangster, Exxonmobil, Richard Laing and NAOC, Roberto Danielle, all applauded Malam Kyari for providing leadership that has engendered the resolution of the disputes.

They stated that the agreements would attract more investments into the Nigerian oil and gas industry.