NNPC to unlock $735 million gas revenue with resolution of OML 130 dispute
The Nigerian National Petroleum Corporation (NNPC) said the resolution of the outstanding issues surrounding the development of Oil Mining Lease (OML) 130, will unlock a total of $735 million gas revenue.
The corporation at the weekend said it has reached an accord with its partners, China National Offshore Oil Company (CNOOC) and South Atlantic Petroleum (SAPETROL), to settle all disputes.
The Group Managing Director (GMD) NNPC, Mallam Mele Kyari, who made the disclosure in a statement signed by Dr Kennie Obateru, Group General Manager Group Public Affairs Division in Abuja, said this became imperative to meet up its target of increasing production to three million barrels per day and unlock gas revenues to the tune of about $225 million in the short term and $510million in the long run.
According to him, the deal was part of the corporation’s PSC Dispute Resolution and Renewal Strategy of 2017 aimed at securing out of court settlement of all disputes around the 1993 Production Sharing Contracts (PSC) and agreeing on terms for their renewal.
Kyari explained that the dispute arose from recognition of certain costs and discordant interpretation of the fiscal terms of the PSC by NNPC and the contractor parties.
With the resolution and signing of the Head of Terms (HoT) document which sets out the terms agreed in principle between parties in the course of negotiations, apart from unlocking over $225 million of gas revenues, he said this will also enable settlement of renewal fees and create an environment conducive to further development of OML 130 with associated benefits to the Federation.
“We are doing this with every other partner in the PSC dispute, we believe that we can close this engagement and conversation with all of you. The HoT will clearly enable us to proceed and have a full settlement, and this will benefit all of us,” he added.
The statement also quoted the Managing Director of CNOOC, Mr Xie Vincent Wensheng, as saying that the agreement has opened a new chapter in the company’s relationship with the corporation, while stressing that it has provided a win-win situation for all parties.
On his part, Managing Director of SAPETROL, Mr Toyin Adenuga, said the resolution of the dispute was a very important step towards further development of OML 130 and other new fields as the terms are now clearly spelt out.
OML 130 is located in the deepwater Niger Delta adjacent to the Nigeria Sao-Tome Joint Development Zone. The block contains the onstream Akpo gas-condensate field, Egina, which is under development, and the undeveloped Preowei field.
Condensate production from Akpo started in March 2009 with first gas sales to Nigeria LNG in April. The Egina field was sanctioned in 2013.
According to reports, Nigeria has been in dispute with the Big Oil firms over the production sharing revenues from the fields the international oil majors operate in partnership with NNPC.
The African OPEC member had also claimed that some of the world’s biggest oil firms operating in the country had illegally exported crude oil from Nigeria as they have failed to properly declare the quantities of their exports.
In 2016, Nigeria, according to reports by the Wall Street Journal, sued the oil majors, including Chevron, Shell, Eni, and Total, claiming that the foreign oil firms failed to declare US$12.7 billion worth of Nigerian oil exports to the United States in the period between 2011 and 2014.
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