July 19, 2024
NNPC, Shell, others renew deep-water oil mining leases
– By Godswill Odiong

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By Eyo Nsima
The Federal Government has renewed the Oil Mining Leases, OML, for OML 125, 130,133, 132, 138, with the Nigerian national Petroleum Company Limited and its partners for another 20 years.

The renewal of the Production Sharing Contracts, for the fields would culminate in the production of about 10 billion barrels of crude oil and generate about $500 billion in revenues.

The OMLs include blocks in Agbami, Bonga, Erha, Apo and Egina with companies such as SNEPCO, Chevron, Texaco, ESSO, Sinok, as partners to NNPC Limited.

Speaking at the PSC and Dispute Settlement Agreement, DSA, signing ceremony in Abuja, the Group Chief Executive Officer of NNPC Limited, Mallam Mele Kyari said: “We all know that in businesses, disputes are inevitable. Disagreements always come when there’s no clarity of understanding of the agreements that businesses go into and very often this is also complicated by laws that may not carry the necessary clarity that is required for businesses to go into contracts.

“And that’s how we landed in the 1993 PSCs debacle since 2007. This conflict has been raging and misunderstanding has become a major issue for all of us in the space leading to arbitration and all forms of litigation.

“And of course, as you do this, it does two things; it damages relationships, and more than anything it stifles investment. That’s exactly what that situation brought on the table, except for one asset, that we practically could not enter into any new commitment since 2007.

“This is clearly related to the disputes around 1993 PSCs and we knew that as the PIA process was going on it was very obvious that the resolution of a dispute over the 1993 PSCs is a critical part of that bargain.

“And today we are happy our country kept its promise. And I understand very clearly that it will not have been possible, except you have some courage and leadership. And all of us must give this credit to President Buhari who agreed that we must resolve this in the most amicable manner.

“In a manner that the county benefits and also in a way that investors get to recover their costs and make the competitive benefits that they must have from their investments. At the end, the PIA recognized all those terms, the fiscal terms that clearly re-engineer to make sure that these conditions are met. And it also allowed us by law to close our disputes in an amicable manner so that we stop all litigation so that there are terms and conditions that will enable us to move forward with our relationship.”

Similarly, the Group General Manager, National Petroleum Investment Management Services, NAPIMS, Engr. Bala Wunti said: “Today, we are at the verge of making history, the history to resolve all pending disputes in our PSCs with a potential to develop and monetize over 10 billion bbls and potentially generate revenue in excess US$500 billion to stakeholders and attainment of energy security for the country.

“Since its introduction of the PSC into Nigeria’s hydrocarbon production algorithm, over 5.9 billion barrels of oil equivalent has so far been produced and monetized by the various PSCs arrangements. Over the last two decades, The PSCs have commutatively accounted for about 40 percent of Nigeria’s oil production”.

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