…Deal to Yield Over $780Million in Immediate Revenues to Government.
The Nigerian National Petroleum Corporation (NNPC) and its Production Sharing Contract (PSC) partners -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.
The five agreements signed include: Dispute Settlement Agreement, Settlement Agreement, Historical Gas Agreement, Escrow Agreement and Renewed PSC Agreement.
The NNPC, in a statement, says that over $10Billion of investment would be unlocked as a result of the agreements, which, it argues “signaled 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”.
Mele Kyari, the corporation’s Group Managing Director, estimates that “the deal would yield over $780Million in immediate revenues to the Federal Government while it would also free the parties from over $9Billion in contingent liabilities”.
Bayo Ojulari, the Managing Director of SNEPCo, contends that the agreements marked the end of a twelve-year dispute that had marred business relationship and affected trust and investment. “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,” the SNEPCo helmsman stated.