State oil firm, Nigerian National Petroleum Corporation (NNPC), is currently aiming at making about N194 billion after reaching a resolution 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.
The corporation is also targeting to improve its production capacity, especially meeting the projection of producing 3 million barrels of crude oil per day and unlocking gas revenues to the tune of about $225 million in the short term and $510million (N194 billion) on the long run.
OML 130, in the deepwater Niger Delta adjacent to the Nigeria Sao-Tome Joint Development Zone, contains the on-stream Akpo gas-condensate field, Egina, which is under development, and the undeveloped Preowei field. Total Upstream Nigeria Ltd operates the block with 24 per cent stake, while Petrobras Oil and Gas BV and SAPETRO hold 16 per cent and 15 per cent stakes respectively.
OML 130 with a 24-percent interest, in partnership with NNPC, SAPETRO, CNOOC E&P Nigeria Limited, and Petrobras Oil and Gas BV. But disputes around the recognition of certain cost and discordant interpretation of the fiscal terms of the 1993 Production Sharing Contracts (PSC) limited the oil block.
The dispute was specifically about tax arising from the $2.3bn acquisition of a 45 per cent stake in the by CNNOC from SAPETRO in 2006.
Group Managing Director of NNPC, Mele Kyari, said in a release that 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.
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, Kyari said 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.
“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 stated.
Managing Director of CNOOC, 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, the managing director of SAPETROL, 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.