Nigerian National Petroleum Company (NNPC) Limited and some International Oil Companies (IOCs) have signed an agreement to ensure the production of about 10 billion barrels of crude oil and generate over $500 billion revenue to all partners.
NNPC officials and their counterparts from the IOCs, including Shell, Chevron, Texaco, Sinopec, Sapetro, ESSO, Exploration and Production Nigeria Limited, among others, renewed their agreements in five Oil Mining Leases (OMLs) namely: OMLs 128, 130,132,133 and 138.
The agreement renewed by the parties were production sharing contracts as well as Dispute Resolution Agreements, among others at a signing ceremony held at the Abuja headquarters of the NNPC.
Speaking at the event, the Group General Manager, National Petroleum Investment Management Services (NAPIMS), Bala Wunti, said: “Cumulatively, we hope to produce and monetise over 10 billion barrels of crude oil with the signatories we had today and this is by no means will give significant revenue to all the parties. We expect over $500 billion revenue for all the stakeholders.”
Earlier, Group Managing Director and Chief Executive Officer of NNPC, Mele Kyari, explained that the Petroleum Industry Act 2021 gave NNPC the legal backing to renegotiate all its existing agreements in conformity with the provisions of the Petroleum Industry Act (PIA) within a year.
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Section 311 (2) of the PIA, which became law on August 16, 2021 after it was signed into law by President Muhammadu Buhari, stipulates that new agreements under new terms will be signed between NNPC, as concessionaire and its contracting partners as of August 15,2022.
Kyari noted that the provision paved the way for the resolution of lingering disputes which created investment uncertainty and stifled new investments in the new investments in the nation’s deep offshore assets.
He said to achieve the objectives, NNPC leveraged the near end-term of the agreement, adding that negotiation was currently ongoing to ensure that the contractors work towards trading the past for the future.
“The agreement would provide several benefits, such as improved long-term relationship with contractors, elimination of contractual ambiguities, especially in relation to gas terms, enablement of yearly contract renewal among others.
“Signing the new agreement is a key milestone achievement of NNPC aimed at ultimately stimulating investments and unlocking opportunities in the upstream sector of the Nigerian oil and gas industry.
The execution of the NNPC and IOCs collaboration will deepen investments, drive development of the company’s resources and ensure that the NNPC’s mandate of ensuring availability and accessibility of energy sources in the country.
