NNPC signs agreement with OML 118 operators to unlock ‘$10 billion investment’

The Nigerian National Petroleum Corporation (NNPC) has signed an agreement with oil mining lease (OML) 118 partners to unlock $10 billion investment in the nation’s deepwater resources.

The NNPC announced the signing of the agreement in a social media post on Tuesday.

Shell Nigeria Exploration and Production Company (SNEPCO) operates OML 118 (Bonga oilfield) on behalf of NNPC and its partners under a production sharing contract (PSC).

The partners in the oilfield are Shell with 55 percent stake; Esso Exploration and Production Nigeria Limited (20 percent); Total E & P Nigerian Limited and Nigerian Agip Oil Company (NAOC) with 12.5 percent stake each.

Bonga is Nigeria’s first deepwater project discovered in 1993.

It lies 120 kilometres south-west of the Niger Delta in a water depth of over 1,000 metres and it can produce 200,000 barrels of oil per day and 150 million standard cubic feet of gas per day.

“This marks a watershed in the administration of deepwater operations in Nigeria. Over $10bn of investment will be unlocked as a result of this development,” the post read.

“By these Agreements, NNPC group and the contractors (OML 118 partners) have settled the long-standing disputes that have bedevilled the PSC administration and entered into a new PSC with clearly aligned terms.

“This renewed relationship will create the stability required for investments in the deepwater terrain. It will also facilitate the $16bn Bonga South West Aparo Project investment by SNEPCO.”

In February 2019, SNEPCO had announced a release of an invitation to tender (ITT) to contractors for the development of the Bonga South West Aparo (BSWA) oilfield.

Kele Kyari, group managing director (GMD) of NNPC, had said in November 2020 that the corporation is close to resolving two disputed oil assets in Nigeria, which are OML 118 and 125.

The two oil assets are products of the contentious PSC arrangement and have been subject of litigation for years, contributing to the delay in achieving Nigeria’s three million barrels per day oil production target.