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."

 

Write to barcelonaeditors@dowjones.com

 

(END) Dow Jones Newswires

May 25, 2021 16:05 ET (20:05 GMT)

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