NNPC Ltd Renews Production Sharing Contract Agreement On OML 125 With Agip

Four days after the Nigerian National Petroleum Company Ltd renewed its dispute resolution/lease renewal agreement with Oil Majors, the National Oil Company on Tuesday signed the last of the 1993 Dispute Settlement Agreements and Renewed Production Sharing Contract for Oil Mining Lease 125 with Nigerian Agip Exploration.

The agreement was sealed at the headquarters of the NNPC Ltd in Abuja.

The Group Chief Executive Officer, of the NNPC Ltd Mele Kyari, signed the agreements on behalf of the National Oil Company while Mr. Chacon Oswaldo signed on behalf of Agip.

OML 125 is located in the western Niger Delta, 40 kilometres offshore. It contains three fields: Abo, Abo North and Okodo. Abo came onstream in 2003, becoming Nigeria’s first ever deepwater producer.

The pact with Agip is coming following last Friday’s five strategic agreements between the NNPC with oil about eight Oil Majors in the country that would unlock huge investments in the oil and gas sector in the country.

The agreements are the Production Sharing Agreement, Dispute Settlement Agreements, Settlement Repayment Agreement, Escrow Agreement.

Some of the Companies are Total Energy, Chevron, Shell, Esso Exploration, Synopec, Equino, Sapetro, Sinoc.

Speaking at the Friday’s event, Kyari had said that the signing of the agreements is consistent with the NNPC’s plan to deepen investment with its partners in the oil and gas sector.

He said the new partnership, would save Nigeria about $9bn contingent liabilities that have crystallized for the federation.

He said, “These companies have been having misunderstanding which is a major issue to all of us leading to arbitration and all source of litigations.

“And of course, as you do this, it does two things, tarnishes relationships and more than anything else, it stiffens investment.

“We are happy and I understand very clearly that it won’t have been possible except you have some courage of leadership and all of us must give this credit to President Muhammadu Buhari who agreed that we must resolve this in the most amicable manner and in a manner that the country will benefit from it.

“The dispute settlement agreement will ultimately put in place the recognition of the Production Sharing Contract and more than anything to put aside debt extending disputes we have with our partners and this is over.”

He commended the partners in the deal for the courage displayed in ensuring that all the disputes surrounding their operations in the oil and gas sector are resolved amicably.

The NNPC Boss expressed optimism that with the settlement of the issues, more investments will come into the country through the oil and gas sector.

“And I must sincerely appreciate these gestures, it’s not something that is significantly common. And the understanding that we have reached. This is history for this country and we must accept this and I believe very strongly on behalf of all of us in NNPC that with the signing of the DSA, every investment will come back because uncertainties have been removed, new investors will come in because of the terms in the petroleum industry acts that enables recovery of cost,” Kyari added.