Nigeria's National Oil Company Settles Production Disputes With Partners on OML 118
May 25 2021 - 3:18PM
Dow Jones News
By Obafemi Oredein
Special to Dow Jones Newswires
IBADAN, Nigeria--Nigerian National Petroleum Corporation
officials signed agreements Tuesday to resolve disputes with
partners operating Oil Mining Lease 118, where the Bonga deepwater
oil field is located.
Mele Kyari, NNPC's group managing director, said that over $10
billion of investment would be "unlocked as a result of the
agreements which signaled the end of the longstanding disputes over
the interpretation of the fiscal terms of the production-sharing
contracts and the emplacement of a clear and fair framework for the
development of the huge deepwater assets in Nigeria."
The agreements have been executed to renew OML 118 for another
20 years, according to NNPC.
The Bonga deepwater field lies 120 kilometers southwest of the
Niger Delta. The field began production in November 2005 and is the
first deepwater oil field in Nigeria with production capacity of
around 200,000 barrels of oil per day and 150 million standard
cubic feet of gas per day.
NNPC's partners are Shell Nigeria Exploration and Production
Company, Total Exploration and Production Nigeria Limited, Esso
Exploration and Production Nigeria Limited and Nigerian Agip
Exploration.
"It produces value for all of us by providing a clear line of
sight for investment in the Bonga bloc of around $10 billion," Mr.
Kyari said. The deal would yield over $780 million in immediate
revenue to the Nigerian government while it would also free the
parties from over $9 billion in contingent liabilities, he
added.
The partners in the Bonga project are Shell, Exxon and Nigeria
Agip.
The agreement is expected to pave the way for development of
other projects in OML 118 including Bonga Southwest Aparo
field.
Bayo Ojulari, SNEPCo. managing director, said the agreements
marked the end of a 12-year dispute that had marred business
relationship and affected "trust and investment."
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(END) Dow Jones Newswires
May 25, 2021 16:05 ET (20:05 GMT)
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