Nigeria: OML 130 - NNPCL Renews 5 Agreements With Partners, Unlocks $2.1bn Final Investment Decision

The Nigerian National Petroleum Company Limited (NNPCL) has announced the renewal of a series of agreements concerning Oil Mining Lease (OML) 130.

The national oil company yesterday announced the renewal of the OML 130 Production Sharing Contract (PSC) and conversion of the acreage to a Petroleum Mining Lease (PML) in accordance with the provisions of the Petroleum Industry Act (PIA) 2021.

In a ceremony held at its headquarters in Abuja and presided over by the permanent secretary, Ministry of Petroleum Resources, Ambassador Gabriel Tanimu Aduda, five agreements were executed.

According to the NNPCL, the agreements included a Production Sharing Contract (PSC) between NNPC Ltd and its Contractors, China National Offshore Oil Corporation (CNOOC) & South Atlantic Petroleum (SAPETRO) with Total Upstream Nigeria (TUPNI) as the operator; a Heads of Agreement (HoA) Amendment between NNPC Ltd, TUPNI, SAPETRO, PRIME 130, & CNOOC; a Settlement Repayment Agreement (SRA) Addendum between NNPC and its Contractors (CNOOC & SAPETRO); Concession Contracts for one Petroleum Prospecting Licence (PPL) and three Petroleum Mining Leases (PML) as well as a Lease & License Instruments between NNPC, TUPNI, SAPETRO, PRIME 130 and Nigerian Upstream Petroleum Regulatory Commission (NUPRC).

This milestone paves the way to firm up Final Investment Decision (FID) on the Preowei amounting to ~USD$ 2.1 billion, subsequently to be followed by Egina South projects lined up by TUPNI and the OML 130 partners to introduce additional volumes to the best-in-class Egina Floating, Production, Storage and Offloading (FPSO) Vessel.

Others in attendance at the signing ceremony were the NNPC Ltd group chief executive officer (GCEO), Mallam Mele Kyari, the chief upstream investment officer (CUIO), Mr Bala Wunti, chief strategy & sustainability officer, Oritsemeyiwa A. Eyesan, NUPRC chief executive, Engineer Gbenga Komolafe, managing directors of TotalEnergies in Nigeria and CNOOC, Mr Mike Sangstar and Mr Li Chunsheng, as well as the executive vice chairman SAPETRO, Senator Daisy Danjuma, and the chief executive officer (CEO) PRIME 130, Mr Aldo Perracini.

OML 130 is in the deepwater Niger Delta, 130 kilometres offshore. The block contains the producing Akpo and Egina fields and the Preowei discovery. The Akpo field was brought onstream in 2009, while the ultra-deepwater Egina field was sanctioned in 2013 and came onstream in 2018.

The acreage was awarded to South Atlantic Petroleum (SAPETRO) via a discretionary allocation by the Federal Government in 1998 as an Oil Prospecting License (OPL) 246. SAPETRO thereafter farmed out 24 per cent to Total Upstream Nigeria (TUPNI) and 16 per cent to Prime 130 Nigeria Limited.

In 2003, the OPL was converted to OML 130 and the federal government, through NNPC, backed into 50 per cent of the Asset in 2005 with SAPETRO as the Contractor with 100 per cent Contractor interest.

This arrangement led to OML 130 having two funding and operational mechanisms, the NNPC's Production Sharing Contract (PSC) governing half of the block and the International Oil Companies' Production Sharing Agreement (PSA) governing the other half. Differences in the interpretation of the 2005 PSC led to disputes that required concerted efforts to resolve, including the execution of the Gas Entitlement Agreement (GEA) in 2021 and a Settlement and Repayment Agreement ("SRA") in 2022.

To date, the Akpo field via the Akpo FPSO has produced over 646 million Barrels of Condensate, while the Egina field via the Egina FPSO has produced over 233 million Barrels of Crude Oil. So far, about 1.6Tcf of gas has been commercialized from both fields with an outstanding record of non-zero gas flare.

OML 130, currently producing ~170,000 barrels per day is the largest producer in TotalEnergies' Nigeria portfolio and amongst the most prolific assets in Nigeria.

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