The Nigerian National Petroleum Corporation (NNPC) have signed five agreements with four of its Production Sharing Contract partners to renew Oil Mining Lease 118 for another 20 years.
The partners involved in the deal include Shell Nigeria Exploration and Production Company, Total Exploration and Production Nigeria Limited, Esso Exploration and Production Nigeria Limited and Nigerian Agip Exploration.
A statement by the Group General Manager, Group Public Affairs Division, NNPC, Dr Kennie Obateru, said five agreements signed were the Dispute Settlement Agreement, Settlement Agreement, Historical Gas Agreement, Escrow Agreement and Renewed PSC Agreement.
The Group Managing Director of NNPC, Mele Kyari, stated that over $10billion of investment will open up as a result of the agreements.
He added that long-standing disputes over the interpretation of the Production Sharing Contracts and fair framework for the development of the huge deep-water assets in Nigeria will come to come to an end.
According to him, the deal will yield over $780 million in immediate revenues to the Federal Government and free the parties from over $9 billion in contingent liabilities.
Kyari said, “This is an indication of a renewed confidence between the NNPC and her partners; between 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 $10bn.”
“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.”
The Country Chair of Shell Companies in Nigeria, Osagie Osunbor, said the OML 118 renewal agreement would remain a watershed in the history of deep-water investments in Nigeria.
The Managing Director, SNEPCo, Mr Bayo Ojulari, said the agreements marked the end of a 12-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,” he said.