NNPC, Partners Sign Gas Agreements, Target $760m Revenue

The Nigerian National Petroleum Corporation and its partners in the Oil Mining Lease 130 Production Sharing Agreement and Production Sharing Contract are projecting to earn over $760m from the Gas Supply Purchase Agreement and Gas Entitlement Agreement executed by the parties in Abuja.

NNPC said on Friday that the agreements were part of the corporation’s gas commercialisation programme and involved Total Exploration and Production Nigeria, China National Offshore Oil Corporation, South Atlantic Petroleum Nigeria Limited and Prime 130 Limited.

It said in a statement issued in Abuja that the sale structure under which the agreements were executed was designed to provide a clear delineation for the allocation of the gas sale proceeds to all the participating parties, including midstream handling and transportation.

NNPC’s Group Managing Director, Mele Kyari, was quoted as saying, “This is a very proud moment for all of us. I understand all the delays, they are completely unavoidable. It is desirable for us to have full alignment of all parties before we proceed.

“The end result is that there would be clarity around our relationship and we would be unlocking resources that have been on the table for many years.

“We now have a clear line of sight around gas revenue of up to $250m and also another $510m that is applicable to the rest of us.”

He noted that apart from the revenue boost, the agreements had also opened up an opportunity to have the dispute settlement agreement for the OML 130 PSC and ultimately to have a renewed production sharing contract which would guide the relationship going forward.

On the recently passed Petroleum Industry Bill, Kyari assured the parties that the fiscal terms proposed in the oil reform legislation remained some of the most attractive in the global oil and gas industry, noting that investors had no cause to worry.

The Managing Director, TEPNG, Mike Sangster, said all parties were committed to the terms of the agreements.

OML 130 is a deepwater block located 130km offshore Niger Delta at water depths of well over 1,000m.