The Nigerian National Petroleum Corporation has agreed with its partners to settle all outstanding issues surrounding the development of Oil Mining Lease 130.
Dr. Kennie Obateru, Spokesman for the corporation, disclosed in a statement on Saturday in Abuja.
The partners are China National Offshore Oil Company and South Atlantic Petroleum.
Obateru said the move was in line with the effort to meet the target of revving up production to three million barrels per day.
He said it would also unlock gas revenues to the tune of about $225 million in the short term and $510 million in the long run for the country.
He quoted the NNPC Group Managing Director, Malam Mele Kyari, as saying at the signing of Head of Terms agreement with the partners that the deal was part of the Corporation’s Production Sharing Contract Dispute Resolution and Renewal Strategy of 2017.
Kyari said the resolution was aimed at securing out of court settlement of all disputes around the 1993 Production Sharing Contracts and agreeing on terms for their renewal.
He explained that the dispute arose from recognition of certain cost and discordant interpretation of the fiscal terms of the PSC by NNPC and the contractor parties.
He said: “With the resolution and signing of HoT, apart from unlocking over $225 million of gas revenues, it will also enable settlement of renewal fees.
“It will create conducive environment 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.”
Kyari commended CNOOC and SAPETROL for their understanding, while expressing delight that the HoT would facilitate the conclusion of all renewal issues.
Also, Managing Director of CNOOC, Xie Vincent Wensheng, said the agreement had opened a new chapter in his company’s relationship with the NNPC, stressing that it had provided a win-win situation for all parties.
On his part, Managing Director of SAPETROL, Toyin Adenuga, said the resolution of the dispute was a very important step toward further development of OML 130 and other new fields as the terms were now clearly spelt out.
The execution of the HoT signals the resolution of a tax dispute that arose from the $2.3 billion acquisition of a 45 per cent stake in OML 130 by CNNOC from SAPETRO in 2006.
The OML 130 consists of the Akpo and Egina Fields, which have been producing since 2009 and 2018 respectively.
It is operated by Total Upstream Nigeria Limited, which holds 24 per cent stake, while Petrobras Oil and Gas BV and SAPETRO hold 16 per cent and 15 per cent stakes respectively.
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