The Nigerian National Petroleum Corporation (NNPC) says it has signed a deal with some oil majors that could unlock over $10 billion investment in an offshore oilfield, as well as free $9 billion in contingent liabilities.
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.
NNPC Group General Manager, Group Public Affairs Division, Dr Kennie Obateru who made the disclosure in a statement in Abuja on Tuesday, said the five agreements signed include, Dispute Settlement Agreement, Settlement Agreement, Historical Gas Agreement, Escrow Agreement, and Renewed PSC Agreement.
Obateru quoted the Group Managing Director of the Corporation,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.
Kyari, according to him, 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.
“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 said.
He further noted 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.
“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,” he said.
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 relationship and affected trust 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 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