Abuja — The Nigerian National Petroleum Corporation (NNPC) has signed an agreement with the Nigeria Agip Oil Company (NAOC), and Oando, for the transfer of its stake in three oil blocks - Oil Mining Lease (OML) 61, 62 and 63 to its upstream subsidiary, the Nigerian Petroleum Development Company (NPDC).
The corporation in a statement obtained from its official twitter handle - @NNPCgroup, disclosed that the transfer was a significant milestone, and geared towards meeting its target of growing Nigeria's crude oil reserve to 40 billion barrels (bbl) as well as improving crude oil production to three million barrels per day (mbpd) by 2023.
The agreement was signed by the NNPC's Group Managing Director, Mallam Mele Kyari; Vice Chairman/Chief Executive of NAOC, Mr. Fiorillo Lorenzo and Deputy Group Chief Executive of Oando Plc, Mr. Omamofe Boyo.
Explaining the details of the agreement, Mele Kyari stated that the NNPC sought and got the approval of the Minister of Petroleum Resources who is President Muhammadu Buhari for the divestment and transfer of its interests to the NPDC, while all parties signed a novation agreement which transferred all the rights and obligations that was formally held by NNPC to the NPDC.
"The federation divested its interests in the NAOC, NNPC joint venture and that means we transfer those interests to NPDC. The meaning of that is to grow NPDC to become a medium-sized upstream company that the federation and the NNPC will be proud of," said Mele Kyari.
He noted that prior to reaching the agreement, there was a disagreement among the parties, which had been addressed and the challenges surmounted.
"We had issues that we could not resolve, that prevented the transfer of those novations; principally, the lack of assurance that NNPC could not deliver to our partners to convince them NPDC will deliver to its responsibilities.
"Today, we have given them all the comfort and condition precedent for them to be convinced that NPDC would deliver. That is why our partners, NAOC and Oando have agreed to sign the novation agreement which will open a new chapter of business for NPDC and our partnership and it will expand the frontier of reserves and production for our country and the companies."