By Francis Ogwo
The Nigerian National Petroleum Corporation (NNPC) has come to an agreement with its partners, China National Offshore Oil Company (CNOOC) and South Atlantic Petroleum (SAPETROL) to resolve all outstanding issues surrounding the development of Oil Mining Lease, (OML) 130.
This was aimed at meeting the objective of boosting its production to 3million barrels per day and gaining about $225 million in the short term and $510million in gas revenues for the country.
The Group Managing Director of NNPC, Mallam Mele Kyari, made the disclosure at the signing of Head of Terms (HoT) agreement with the partners Thursday at the NNPC Towers, Abuja,
He noted that the deal was part of the Corporation’s PSC Dispute Resolution and Renewal Strategy of 2017 with an objective of achieving out of court settlement of all disputes surrounding the 1993 Production Sharing Contracts (PSC) while agreeing on terms for their renewal.
The Corporation’s Group General Manager, Group Public Affairs Division, Dr. Kennie Obateru, in a press statement had stated that the disagreement emanated from recognition of the certain cost and discordant interpretation of the fiscal terms of the PSC by NNPC and the Contractor parties.
He stated that with the settlement and signing of the Head of Terms (HoT) document, which specifies the terms agreed in principle between parties in the course of negotiations, apart from unlocking over $225 million of gas revenues, it will also aid in the settlement of renewal fees and create an environment conducive to further the 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,” Mallam Kyari stated.
He also applauded CNOOC and SAPETROL for their cooperation and expressed hopes that the HoT will follow up the conclusion of all issues related to the renewal.
While responding, the Managing Director of CNOOC, Mr. Xie Vincent Wensheng, noted that the agreement has unlocked a new phase in his company’s relationship with NNPC and added that all parties involved stand on the ground of fairness.
Also speaking was the Managing Director of SAPETROL, Mr. Toyin Adenuga, who said the settlement of the dispute was a significant move in the further development of OML 130 and other new fields with the terms now put in clear terms.
According to the release, the execution of the HoT ends a long-standing tax dispute that started from the $2.3bn acquisition of a 45% stake in OML 130 by CNNOC from SAPETRO in 2006.
Note that the OML 130, which is operated by Total Upstream Nigeria Ltd, consists of the Akpo and Egina Fields, which have been producing since 2009 and 2018 respectively.
Total Upstream Nigeria Ltd holds 24% stake, while Petrobras Oil and Gas BV and SAPETRO hold 16% and 15% stakes respectively.
