By Abdullahi Sabiu
The Nigerian National Petroleum Company Ltd. (NNPC Ltd) and its partners in Oil Mining Leases (OMLs) on Friday signed renewed Production Sharing Contracts (PSCs) agreements to produce 10 billion barrels of oil cumulatively.
The development concluded negotiations on a renewed PSC, in line with the new provisions of the Petroleum Industry Act (PIA) Section 311.
The new renegotiations put to rest the protracted dispute between the NNPC Ltd. and the Contractor Parties in OMLs 125, 128, 130, 132 and 133, as well as 138 PSCs that lasted for almost 30 years
Speaking at the signing of the Head of Terms (HoT) agreement in Abuja, Malam Mele Kyari, the Group Chief Executive Officer (GCEO), NNPC Ltd, said with the PIA, it was obvious the resolution of the 1993 PSC dispute was a critical part of that bargain.
Kyari said the deal was part of the company’s PSC Dispute Resolution and Renewal Strategy of 2017, aimed at securing settlement of all disputes around the 1993 PSC and agreeing on terms for their renewal.
He lauded President Muhammadu Buhari who agreed to the resolution in a most amicable manner and in a way to recover investments cost and boost competitiveness.
Kyari said disputes and disagreements were inevitable but could happen when there was no clarity of understanding of business agreements and were often complicated by laws that did not carry the clarity necessary for business contracts.
He said there had since been issues leading to arbitration and all forms of litigation in the space which could damage relationships and stipple investments.
According to the GCEO, with the agreements, contracts will have minimal ambiguities, while for the NNPC and for accounting it put aside potential contingent liability of about nine billion dollars.
Kyari said with the resolution it would enable settlement of renewal fees and create a conducive environment for further development of the OMLs with associated benefits to the federation.
In his remarks during the ceremony, Country Chair, Shell Companies in Nigeria, Osagie Osunbor, discussed the execution of the OML133 PSC contract as significant progress towards harnessing the deep water resources of Nigeria.
Similarly, the Chairman/Managing Director of Exxon Mobil Companies in Nigeria, Richard Laing, said that the renewal of the Usan and Erha leases has validated his company’s commitment to maintaining a significant deepwater presence in Nigeria through ESSO Exploration and Production Nigeria(Deep Water) Ltd.
On his part, Chairman/Managing Director of Chevron Nigeria Limited(CNL), Rick Kennedy, said Chevron is proud of its strong partnership with Nigeria and its various partners and remains also committed to supporting the country to develop its energy resources safely and reliably.
According to a statement released on Friday, August 12 by Garba Deen Muhammad, Group General Manager, Group Public Affairs Division, NNPC Ltd, the renewed PCs made possible by the Petroleum Industry Act(PIA) would provide several benefits such as an improved long-term relationships with contractors, elimination of contractual ambiguities, especially in relation to gas terms and enable early contract renewal, among others.
Dignitaries who witnessed the signing ceremony were the Honourable Minister of State for Petroleum Resources, Chief Timipre Sylva; Board members NNPC Ltd led by the chairman, Margerie Chuba Okadigbo; Chief Executive of NUPRC, Engr Gbenga Komolafe; Chief Executive of NMDPRA, Faruk Ahmed and the Executive Chairman of FIRS, Muhammad Namu.
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