New agreements with IOCs will unlock opportunities in upstream sector, says Kyari

It noted that the execution of the PSCs would deepen investment and development of Nigeria’s rich petroleum resources and ensure that the trifold mandate of the NNPC Ltd to ensure energy availability, sustainability, and accessibility was achieved.

The Group Chief Executive Officer, NNPC, Mele Kyari stated this during the signing of agreements with international oil companies in Abuja on Friday.

In a bid to increase the production of crude oil in the country and increase revenue, the NNPC Ltd and international oil companies operating in Nigeria had signed various agreements.

The agreements would see the production of about 10 billion barrels of crude oil and generation of over $500bn revenue to all parties involved.

NNPC officials and their counterparts from the IOCs including Shell, Chevron, Texaco, Sinopec, Sapetro, Esso Exploration and Production Nigeria Limited, among others, renewed their agreements in five Oil Mining Leases that included OMLs 128, 130,132, 133, and 138.

The agreements renewed by the parties were Production Sharing Contracts, as well as Dispute Resolution Agreements, among others at a signing ceremony held at the Abuja headquarters of NNPC.

Speaking at the event, Kyari said: “The signing of the new PSCs is a key milestone achievement by NNPC Ltd which would ultimately unlock opportunities within the Nigeria upstream sector.

“The execution of the PSCs will deepen investment and development of Nigeria’s rich petroleum resources and ensure that the trifold mandate of the NNPC Ltd to ensure energy availability, sustainability, and accessibility is achieved.

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“Ultimately, the new PSCs will provide an inflow of Foreign Direct Investment, expanded access to affordable energy, job creation and socio-economic development.”

The NNPC Ltd chief explained that the Petroleum Industry Act 2021 gave NNPC the legal backing to renegotiate all its existing PSCs in conformance to the provisions of the new Act within a one-year period.

The PIA became law on August 16, 2021 after it was signed into law the same day by President Muhammadu Buhari.

The PIA in Section 311(2) stipulated that new PSC agreements under new Heads of Terms will be signed between NNPC Ltd as concessionaire and its contractor parties within one year of signing the PIA into law, giving a deadline of August 15, 2022.

The NNPC Ltd chief noted that this provision paved the way for the resolution of lingering disputes which created investment uncertainty and stifled new investments in the nation’s deep offshore assets.

According to him, the NNPC leveraged on the near end term of the PSCs and the parties’ interest to renew the PSCs as a negotiation currency in bringing the contractors to work towards trading the past for the future.

“These renewed PSCs would provide several benefits such as improved long-term relationships with contractors, elimination of contractual ambiguities especially in relation to gas terms, enable early contract renewal, among others,” he stated.

The Group General Manager, National Petroleum Investment Management Services, Bala Wunti, who spoke during the signing, said: “Cumulatively we hope to produce and monetise over 10 billion barrels of oil with these signatures that we had today.

“And this by no means will give significant revenue for all the parties. We expect over $500bn of revenue for all the stakeholders.”

The Nation