in , ,

NNPC signs deal with CNOOC, SAPETROL to resolve OML 130 dispute

*Says resolution unlocks $510m in gas revenue

By Obas Esiedesa

The Nigerian National Petroleum Corporation (NNPC) says it has reached an agreement with its partners, China National Offshore Oil Company (CNOOC) and South Atlantic Petroleum (SAPETROL), to settle all outstanding issues surrounding the development of Oil Mining Lease, (OML) 130.

NNPC in a statement on Saturday explained that the deal will help its bid to meet the target of revving up production to three million barrels per day and unlock gas revenues to the tune of about $225 million in the short term and $510 million in the long run for the Federation.

The statement by NNPC’s Spokesman, Dr. Kennie Obateru said the deal was signed in Abuja on Thursday.

Speaking at the signing of Head of Terms (HoT) agreement, the Group Managing Director of NNPC, Mallam Mele Kyari, said 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.

Obateru explained in the statement 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.

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, it will also enable settlement of renewal fees and create an environment conducive to further development of OML 130 with associated benefits to the Federation, Obateru added.

He quoted Mr. Kyari as saying: “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 will facilitate the conclusion of all renewal issues.

In his response, the Managing Director of CNOOC, Mr. Xie Vincent Wensheng, said the agreement has opened a new chapter in his company’s relationship with NNPC, 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.

The execution of the HoT signals the resolution of a tax dispute that arose from the $2.3bn acquisition of a 45% 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 Ltd which holds 24% stake, while Petrobras Oil and Gas BV and SAPETRO hold 16% and 15% stakes respectively.

Written by ExpressDay

Comments

Leave a Reply

Your email address will not be published. Required fields are marked *

Loading…

0

Comments

0 comments

Aisha Buhari flown to Dubai for medical treatment

Senator Buruji dies of Covid-19