The Nigerian National Petroleum Company Limited (NNPC), on Friday signed a contract extension for the Oil Mining Leases (OMLs) with five international oil companies (IOCs).
The renewed Production Sharing Contracts (PSCs) are expected to produce 10 billion barrels of oil cumulatively that could earn up to $500 billion investment for the country.
The new agreements are in line with the new provisions of Section 311 of the Petroleum Industry Act (PIA), and lays to rest the protracted dispute between the NNPC Ltd. and the IOCs on OMLs 125, 128, 130, 132 and 133, as well as 138 PSCs.
PSC partners who renewed their partnerships included the 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).
Speaking at the signing of the Head of Terms (HoT) agreement in Abuja, the Group Chief Executive Officer (GCEO), NNPC Limited, Mele Kyari, said the move was “a major step towards boosting Nigeria’s crude production and unlocking investments in the deepwater space post-Petroleum Industry Act (PIA) enactment.”
He added that it was also part of the Company’s PSC Dispute Resolution and Renewal Strategy of 2017, aimed at securing settlement of all disputes around the 1993 PSC.
This follows the President’s directive that disputes regarding the ease of doing business raised by the contracting partners be addressed amicably and in a way to recover investment costs and boost competitiveness.
In its twitter handle, @Exxonmobil-NG, the company announced the renewals of its OMLs 133 (Erha), and 138 (Usan) deepwater leases for another 20 years.
“This includes extensions of Production Sharing Contracts with our partner, NNPC Ltd.
“These renewals validate ExxonMobil Nigeria’s earlier commitment to maintain a significant deep-water presence in Nigeria, via Esso Exploration and Production Nigeria (Deepwater) Limited (EEPNL),” the company tweeted.
ExxonMobil took to Twitter to announce the renewal of its OMLs 133 (Erha) and 138 (Usan) deepwater leases for a further 20–year period.
The Tweet read: “This includes extensions of Production Sharing Contracts with our partner, NNPC Limited.
The HoT is a major step towards boosting Nigeria’s crude production and unlocking investments in the deepwater space post-Petroleum Industry Act (PIA) enactment.
Dispute resolution
Kyari argued that disputes and disagreements were inevitable, and happened when there was no clear understanding of business agreements and often complicated by ambiguous laws.
Contributing, the Group General Manager, National Petroleum Investment Services (NAPIMS), Bala Wunti, disclosed that since inception, over 5.9 billion barrels of oil equivalent were produced and monetised by various PSCs arrangements, and accounted for about 40% per cent of Nigeria’s oil production.
He said NAPIMS in compliance with the GCEO directive, with its partners are aligned on 2022 targeting final investment decisions (FIDs) on new oil and gas projects – Bonga North Project and Agbami Gas Projects.
“Cumulatively, these brownfield projects will bring Foreign Direct Investment (FDI) of $4 billion as well as bring additional volume of 170kbbls/d of oil and 560MSFD gas.
“We are at the verge to resolve all pending disputes in our PSCs to develop and monetise over 10 billion barrels and generate revenue in excess of $500 billion for stakeholders, and attainment of energy security for the country,” Wunti said.
He said partners are targeting FIDs on major projects between 2023 and 2024, including Shell’s Bonga South West Aparo (BSWA) and Bolia-Chota,; ExxonMobil’s Owowo, and Bosi; Chevron’s Agbami gas projects; and TotalEnergies’ Preowei projects.
Also commenting, the Commission Chief Executive (CCE), Nigerian Upstream Petroleum Regulatory Commission (NUPRC), Gbenga Komolafe, said the renegotiated PSCs were another milestone in the PIA’s implementation, adding that the law has given the new NNPC Ltd. assurance to operate in line with international best practices.
He noted that given the spate of divestments being witnessed, the nation looks up to the NNPC to lead other indigenous operators in tuning their weakness into strength and assume envious position among its contemporaries.
Also speaking, Mr Farouk Ahmed, the Authority Chief Executive (ACE), Nigeria Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), reassured the parties of a collaborative effort aimed at curbing oil theft and boosting oil assets.
