The Nigerian National Petroleum Company (NNPC) Ltd and its partners on Friday cleared lingering disputes that attracted $9 billion contingency liability as they signed new oil production pacts for the recently renewed Oil Mining Leases (OMLs) for six oil fields.
The OMLs 125, 128, 130, 132, 133, and 138, were renewed for another 20 years and NNPC Ltd along with its contractors renegotiated the Production Sharing Contracts (PSCs) have finalised negotiations in line with the provisions of the Petroleum Industry Act (PIA) 2021 Section 311.
Speaking at the signing of the renegotiated Production Sharing Contract (PSC), Dispute Settlement Agreement (DSA), Escrow Agreement, and Settlement Agreement in Abuja, the Group Chief Executive Officer (GCEO) of NNPC Ltd, Malam Mele Kyari, said there have been arbitrations caused by the previous PSC for the OMLs, noting that the new PIA, re-engineered the reforms.
Kyari said, “the DSA has put aside all contingent liabilities of about $9 billion reduced to a bottom line that all of us can accept but this won’t have happen if our partners didn’t give us certain rights and obligations.
“With the signing of the DSA and the new PSC, investments will come back,” and there will be more expansion for the petroleum industry.
He also said government is taking massive action on crude oil theft with the security agencies to ensure investments are secured
“As you invest, there is also the guarantee of evacuation,” Kyari assured the investors.
Chairman of the NNPC Ltd board, Sen. Margery Chubs Okadigbo, lauded the partners for ending the disputes.
The Commission Chief Executive, Nigerian Upstream Petroleum Regulatory Commission (NUPRC), Engr. Gbenga Komolafe, said, “The nation looks up to NNPC to lead other indigenous operators, turning our weakness into strength. With the reforms in the new NNPC, it will assume envious position like Petrobras, Petronas and Saudi Aramco,” as he assured of the regulator’s support.”
The Authority Chief Executive, Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), Farouk Ahmed, also said the government was addressing crude oil theft issues noting that, “It is one thing to produce and it is another thing to monetize it.”
The NNPC Ltd partners include ESSO, Chevron, Total, SNEPCO, Equinox, CNOOC, Texaco and SAPETRO.
The Group General Manager, National Petroleum Investment Management Services (NAPIMS), Bala Wunti, said, “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.”
He also said NNPC Ltd is reaching Financial Investment Decision for some brownfield projects which he said, will fetch $4 billion in revenue and boost gas supply by over 600 million SCF and 200m barrels of oil from them.
The GCEO of NNPC Ltd also launched a crude oil monitoring system and platform, to enable citizens contact the company on cases of suspected oil theft and vandal activities around oil communities.