NNPC Seals Pact With Total, SEPETRO, Two Others For OML 130 Development

The Nigerian National Petroleum Corporation has sealed an agreement with four oil companies for the development of Oil Mining License 130.

The four companies, which entered into the agreement signed by the NNPC GMD Mele Kyari, are TOTAL, Energies, Sapetro, and CNOOC.

OML 130 is a deepwater block which is 130 kilometres offshore Niger Delta at water depts well over 1000m.

The OML 130, which was first OPL 246 was awarded in 1998 as a discretionary allocation to SAPETRO and was later converted to OML 130 in February 2005 after commercial discovery of Akpo and Egina in 2000 and 2003 respectively.

At conversion,the Federal Government represented by the NNPC exercised its back-in rights in the block whereby in April 2005, NNPC as concessionaire entered into a Petroluem Sharing Contract with SAPETRO as contractor and TUPNI as operator for 50 per cent of the interest in OML 130 PSC and a Petroluem Sharing Agreement between TUPNI, SAPETRO and PRIME for the other 50 per cent interest in the OML 130 Block.

In April 2006, SAPETRO farmed-out 90 per cent of its Contractor interest in the OML 130 PSC to CNOOC.

It was gathered that Akpo and Egina commenced production in 2009 and 2018 respectively and with a current total production of about 250kpd for oil and 350mmscfd of gas.

Findings revealed that the remaining reserves on the block stand at almost one billion barrels of liquids and over 1.2TCF

About 100 per cent of the gas is transported and sold to NLNG through Akpo-Amenam gas Pipeline was funded in kind by the PSC under the GUA for a consideration of 1tcf of gas which was achieved in July 2018 thus terminating the GUA.

The GUA upon its expiration, parties will agree on the post 1TCF regime for the monetization of the gas.

However due to underlying dispute on the PSC and other reasons, the post 1TCF regime was never agreed upon.

Because there was no agreement, parties agreed to sequester the money in an escrow account

However, following indicative resolution towards the early renewal of the PSC and underlying license, parties have now negotiated and agreed on a gas sales framework for the 100 per cent volume under the PSC and the PSA

Based on the agreement signed in Thursday, the sale structure under which the GSA will be executed provides a clear delineation for the allocation of the gas sale proceeds to all the participating parties including midstream handling and transportation.

It is expected that with the signing of this contract, parties will exit the escrow where the money was sequestered, and payment be done in line with the agreed framework.

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