The Nigerian National Petroleum Corporation (NNPC) and its Production Sharing Contract (PSC) partners yesterday executed joint agreements to renew Oil Mining Lease (OML) 118 for another 20 years.
The corporation also urged investors to take interest in opportunities in its frontier basins, gas fields, pipeline networks as well as its integrated power supply assets.
The NNPC listed its PSC partners as 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).
The five deals signed were the dispute settlement agreement, settlement agreement, historical gas agreement, escrow agreement and the renewed PSC agreement.
A statement by the Group General Manager, Group Public Affairs Division of the NNPC, Dr. Kennie Obateru, quoted the Group Managing Director of the Corporation, Mallam Mele Kyari, as saying that over $10 billion of investment would be unlocked as a result of the agreements.
He said the deal signalled the end of the long-standing disputes over the interpretation of the fiscal terms of the PSC and the emplacement of a clear and fair framework for the development of the huge deepwater assets in Nigeria.
Kyari stated that the move was 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 $10 billion,” he added.
He said the deal would yield over $780 million in immediate revenues to the federal government while it would also free the parties from over $9 billion in contingent liabilities.
“Ultimately, these agreements will engender growth in our country where investment will come in for other assets, not just in the deepwater, but even for new investors. It is an opportunity for them to see that this country is ready for business,” he added.
Kyari lauded President Muhammadu Buhari, the Minister of State for Petroleum Resources, Chief Timpre Sylva, and the NNPC board of directors for enabling the corporation to achieve the feat.
In his remarks, 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 deepwater investments in Nigeria.
He added that the giant stride will further bolster investors’ confidence in the country.
Also, the Managing Director of SNEPCo, Mr. Bayo Ojulari, stated that the agreements marked the end of a 12-year dispute that had marred business relationship and affected trust and investment.
“Today, we have signed agreements that define the future of deepwater for Nigeria. This is the first deepwater 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,” he stated.
Managing Directors of Total, Mike Sangster; ExxonMobil’s, Richard Laing and NAOC’s, Roberto Danielle, praised the NNPC for providing leadership, which engendered the resolution of the disputes.
They assured the corporation that the agreements would attract more investments to the industry.
Meanwhile, the NNPC yesterday urged investors to take advantage of investment opportunities in Nigeria’s frontier basins, gas fields, pipeline networks as well as its integrated power supply assets.
Speaking at this year’s virtual Nigerian Oil & Gas Opportunity Fair (NOGOF 2021) themed ‘’Leveraging Opportunities and Synergies for Post Pandemic Recovery of the Nigerian Oil & Gas Industry,” Kyari stated that having been ravaged and disrupted by the impact of the COVID-19 pandemic, the industry was in dire need of fresh investments.
Kyari said at the two-day event organised by Nigerian Content Development Monitor Board (NCDMB), that there was the need to foster institutional collaborations, maximise participation of Nigerians in oil and gas activities, and link oil and gas sector to other areas of the economy.
Kyari spoke even as the NCDMB Executive Secretary, Mr. Simbi Wabote, said the board was eyeing at least $3.7 billion in investments and commercial partnership and had committed a total of $332 million under its commercial ventures partnership programme to achieve the goal.
According to the NNPC boss, the oil and gas industry in Nigeria is replete with opportunities from the upstream, midstream to the downstream and even to the services sectors.
He stated that opportunities abound for potential investors to come into the sector, adding that synergies could be created between the NNPC and potential investors, towards assured value creation and a guaranteed fair share of Return on Investment (RoI).
Wabote, in his remarks, listed some of the partnerships undertaken by the board to include the 5,000 barrels per day Waltersmith modular refinery in Ibigwe, Imo State, NEDO gas processing company in Kwale, Delta State and a 300mmscfd Kwale gas gathering hub.