Nigeria's state-owned oil company NNPC Ltd said on Thursday it had renewed a production sharing contract with Total, China National Offshore Oil Corp and others, a major step to resolving disputes on a deepwater oil block in the Niger Delta.
The Nigerian National Petroleum Company Limited has announced the renewal of the Oil Mining Lease 130 Production Sharing Contract and conversion of the acreage to a Petroleum Mining Lease in accordance with the provisions of the Petroleum Industry Act 2021.
In a ceremony at the NNPCL towers, presided over by the
Permanent Secretary, Federal Ministry of Petroleum Resources, Amb. Gabriel
Aduda, five agreements were executed.
These include a Production Sharing Contract between NNPC Ltd
and its contractors, China National Offshore Oil Corporation and South Atlantic
Petroleum with Total Upstream Nigeria as the operator, ahead of the agreement
amendment between NNPC Ltd, TUPNI, SAPETRO, PRIME 130, & CNOOC.
Others include a Settlement Repayment Agreement addendum
between NNPC and its contractors (CNOOC & SAPETRO), concession contracts
for one Petroleum Prospecting Licence (PPL) and three Petroleum Mining Leases,
and Lease & License Instruments between NNPC, TUPNI, SAPETRO, PRIME 130 and
Nigerian Upstream Petroleum Regulatory Commission.
NNPC said the milestone had paved the way to firm up Final
Investment Decision on the Preowei, amounting to about $2.1bn, subsequently to
be followed by Egina South projects lined up by TUPNI and the OML 130 partners
to introduce additional volumes to the best-in-class Egina Floating,
Production, Storage and Offloading vessel.
The oil firm stated that other persons who attended the
signing ceremony were the NNPC Ltd Group Chief Executive Officer, Mele Kyari;
Chief Upstream Investment Officer, Bala Wunti; and Chief Strategy &
Sustainability Officer, Oritsemeyiwa Eyesan.
Others include the NUPRC Chief Executive, Gbenga Komolafe;
managing directors of TotalEnergies in Nigeria and CNOOC, Mr Mike Sangstar; and
Li Chunsheng; as well as the Executive Vice Chairman SAPETRO, Sen. Daisy
Danjuma; and the Chief Executive Officer, PRIME 130, Aldo Perracini.
OML 130
OML 130 is in the deepwater Niger Delta, 130 kilometres
offshore. The block contains the producing Akpo and Egina fields and the
Preowei discovery.
The Akpo field was brought onstream in 2009, while the
ultra-deepwater Egina field was sanctioned in 2013 and came onstream in 2018.
The acreage was awarded to South Atlantic Petroleum via a
discretionary allocation by the Federal Government in 1998 as an Oil
Prospecting License 246.
SAPETRO thereafter farmed out 24 per cent to Total Upstream
Nigeria and 16 percent to Prime 130 Nigeria Limited.
In 2003, the OPL was converted to OML 130 and the Federal
Government, through NNPC, backed into 50 percent of the Asset in 2005 with
SAPETRO as the Contractor with 100 percent contractor interest.
This arrangement led to OML 130 having two funding and
operational mechanisms, the NNPC’s Production Sharing Contract governing half
of the block and the international oil companies’ Production Sharing Agreement
governing the other half.
Differences in the interpretation of the 2005 PSC led to
disputes that required concerted efforts to resolve, including the execution of
the Gas Entitlement Agreement in 2021 and a Settlement and Repayment Agreement
in 2022.
To date, the Akpo field via the Akpo FPSO has produced over
646 million barrels of condensate, while the Egina field via the Egina FPSO has
produced over 233 million barrels of crude oil.
So far, about 1.6trillion standard cubic feet of gas has
been commercialised from both fields with an outstanding record of non-zero gas
flare.
OML 130, currently producing about 170,000 barrels per day
is the largest producer in TotalEnergies’ Nigeria portfolio and among the most
prolific assets in Nigeria.
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