Leadership (Abuja)
15 October 2008
Nigerian National Petroleum Corporation (NNPC) yesterday signed an agreement with Total to pep up the presidential directive to international oil companies (IOCs) on their domestic gas supply obligations.
Abubakar Yar'Adua, acting Group Managing Director (GMD) of NNPC, and Mr Guy Maurice, Managing Director of Total Exploration and Production Nigeria Ltd (TEPNG), signed the document in Abuja for their companies.
The signing and exchange of the Modified Carry Agreement (MCA) would enable Total upgrade its Oil Mining Licence (OML) 58.
With the project upgrade, Total would be able to deliver incremental gas and condensate production on time.
The Minister of State for Energy (Gas), Chief Emmanuel Odusina, described the event as another milestone in the development of the oil and gas industry.
He said the agreement entailing a quarter of a billion dollars was the first phase of a one-billion-dollar project development.
According to Odusina, Total has blazed the trail with regard to the IOCs' domestic gas supply obligations, which is critical to this administration.
In a remark, Yar'Adua said the agreement was a result of the successful negotiation between the NNPC and Total to enable the joint venture (JV) partner fund NNPC's equity of about $1 billion for the OML 58 upgrade.
"In the following weeks, the NNPC would be signing additional agreements with other JV partners to cover $3.8 billion of the 2008 expenditures.
"The JV partner funding through carry arrangement between NNPC and its JV partners is not new," he said.
Yar'Adua said, however, that the carry arrangement had been modified so that repayment and compensation due to the JV carrying partner would be paid in cash.
He explained that the cash would be realised from the sale of crude oil or gas produced from the relevant carry project rather than the previous repayment with crude oil lifting.
Maurice, on his part, said that the incremental gas would serve both to comply with TEPNG's domestic gas obligation and to feed export commitments through NLNG.
"Moreover, this gas in particular will feed the new Obite 440MW Independent Power Plant built jointly by NNPC and Total and connected to the national grid," he said.
Maurice said the agreement would promote sustained production investment on Nigeria's onshore and offshore joint venture operations.(NAN)
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