OML 118: NNPC, SNEPCo, Others Sign Multi-Billion Dollars Agreement

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.

A statement by the Group General Manager, Group Public Affairs
Division of the NNPC, Dr. Kennie Obateru, quoted the Group Managing
Director of the Corporation, Mallam Mele Kyari, as saying that over
$10bn of investment would be unlocked as a result of the
agreements, which 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.

According to him, this is an indication of “a renewed confidence
between 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 $10billion,” Mallam Kyari stated.

He disclosed 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.

“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,” the GMD
enthused.

He thanked President Muhammadu Buhari, the Minister of State for
Petroleum Resources, Chief Timpre Sylva, and the NNPC Board of
Directors for enabling the Corporation to achieve this laudable
landmark.

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, assuring that the
giant stride would further bolster investor confidence in the
country.

Managing Director of SNEPCo, Mr. Bayo Ojulari, noted 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.

On their parts, the Managing Directors of Total, Mike Sangster,
Exxonmobil, Richard Laing and NAOC, Roberto Danielle, all applauded
the GMD NNPC, Mallam 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.

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.

A statement by the Group General Manager, Group Public Affairs
Division of the NNPC, Dr. Kennie Obateru, quoted the Group Managing
Director of the Corporation, Mallam Mele Kyari, as saying that over
$10bn of investment would be unlocked as a result of the
agreements, which 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.

According to him, this is an indication of “a renewed confidence
between 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 $10billion,” Mallam Kyari stated.

He disclosed 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.

“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,” the GMD
enthused.

He thanked President Muhammadu Buhari, the Minister of State for
Petroleum Resources, Chief Timpre Sylva, and the NNPC Board of
Directors for enabling the Corporation to achieve this laudable
landmark.

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, assuring that the
giant stride would further bolster investor confidence in the
country.

Managing Director of SNEPCo, Mr. Bayo Ojulari, noted 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.

On their parts, the Managing Directors of Total, Mike Sangster,
Exxonmobil, Richard Laing and NAOC, Roberto Danielle, all applauded
the GMD NNPC, Mallam 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.