The Nigerian National Petroleum Corporation (NNPC), the government-owned National Oil Company, has reached an agreement with its private sector partners, China National Offshore Oil Company (CNOOC) and South Atlantic Petroleum (SAPETROL), to resolve all outstanding issues relating to the development of the Oil Mining Lease, (OML) 130
The NNPC in a statement said resolving the dispute will reeve oil production to three million barrels per day and unlock gas revenues to the tune of about US$225mn in the short term and US$510mn in the long run.
With the resolution which sets out the terms agreed in principle between parties in the course of negotiations, apart from unlocking more than US$225mn of gas revenue said NNPC, it will also enable settlement of renewal fees and create an environment conducive to the further development of OML 130 with associated benefits to the nation.
The OML130 block, a deepwater project is comprised of prolific bloc’s four oil fields: Akpo, Egina, Egina South and Preowei. Akpo. Production from the Egina Field block discovered in 2003 is and the second development in production after the Akpo field, located 150 km off the coast of Nigeria in approximately 1600 m of water started in January 2019 and consisted of a Floating Production Storage and Offloading (FPSO) unit and a Subsea Production System.
CNOOC International has a 45 per cent working interest in the OML130 block, and its partners Total Upstream Nigeria Limited, who is the operator of the block holds a 24 per cent working interest, Prime Oil and Gas (16 per cent working interest) and South Atlantic Petroleum Limited (15 per cent working interest).
The group managing director of NNPC, Mele Kyari, said the deal was part of the corporation’s Production Sharing Agreement, PSC dispute resolution and renewal strategy aimed at securing out of court settlement of all disputes around the 1993 Production Sharing Contracts (PSC) and agreeing on terms for their renewal which arose from recognition of the certain cost and discordant interpretation of the fiscal terms of the PSC by NNPC and the contractor parties.
“We are doing this with every other partner in the PSC dispute, we believe that we can close this engagement and conversation that will clearly enable us to proceed and have a full settlement, and this will benefit all of us,” Kyari stated.
In his response, the managing director of CNOOC, Xie Vincent Wensheng, said the agreement had opened a new chapter in his company’s relationship with NNPC, stressing that it has provided a win-win situation for all parties.
On his part, managing director of SAPETROL, Toyin Adenuga, said the resolution of the dispute was a crucial step towards further development of OML 130 and other new fields as the terms are now clearly spelt out.
The execution of the signals the resolution of a tax dispute that arose from the US$2.3bn acquisition of a 45 per cent stake in OML 130 by CNNOC from SAPETRO in 2006.
