The Group Chief Executive Officer of NNPC Limited Mr. Bashir Bayo Ojulari, has said that the Production Sharing Contract PSC has an incentive for performance which includes a $10m signature bonus, a production bonus of two million and four million barrels or a cash payment on attainment of 35 million barrels of production, respectively.
He stated this at the closing ceremony of the 2024 Licensing Round yesterday in Abuja.
According to him, “The PSC is a major milestone that speaks to the regulator’s commitment to implement the provisions of the PIA and will bring NNPCL closer to achieving the target of three million barrels per day and additional investments of $60bn by the end of 2030.”
“PSC is unique because it is the first PSC that comprehensively covers in scope both crude oil and natural gas. The GCEO said following the PIA, tapping non-associated gas in the deep water is one of the areas the industry needed to push the frontiers.”
The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) has overseen the successful execution of the Production Sharing Contract (PSC) covering Petroleum Prospecting Licences 2000 and 2001 with Nigerian National Petroleum Company Ltd (NNPC) and the TotalEnergies–Sapetro Consortium.
The Commission Chief Executive, Engr. Gbenga Komolafe, said the deal marks a new chapter in Nigeria’s upstream oil and gas industry, adding that President Bola Ahmed Tinubu’s 2024 Executive Orders: #40 on fiscal incentives, #41 on local content, and #42 on cost efficiency and contract timelines, have catalysed massive investment inflows for shared prosperity.
The CCE said the awardees of PPL 2000 and PPL 2001 are beneficiaries of the reforms of President Tinubu.
However, he noted that “Every award has very clear terms about its tenure but the clear provisions of the PIA being the instrument that guides our regulatory activities is that unexplored acreages are expected to be relinquished apart from the clear terms of the award itself.”Komolafe congratulated TotalEnergies on its success in the Licensing Round.
TotalEnergies has over 60 years of operations in Nigeria and holds 80% contractor interest, as well as Sapetro with 30 years of operations and holding 20% contractor interest.
He reiterated that the Licensing Round was based on a fair, transparent, and competitive bidding process in line with Section 73 of the PIA. He commend President Bola Ahmed Tinubu for vacating entry barriers.
The CCE commended the NNPCL and the Consortium for their role in exploration and production activities in Nigeria. The CCE said, “This PSC signals the start of a committed work programme that will help us unlock the untapped geological potential of our deep-water, expand our reserves, boost production, and strengthen Nigeria’s energy security.
”According to him, the PSC sets out rules including payment of a signature bonus as stipulated in the licensing round and production bonuses tied to commercial milestones, ensuring Federation obligations relating to Decommissioning and Abandonment and Environmental Remediation Fund; a defined minimum work programme, with the requirement to provide guarantees to assure performance, among others.
The CCE pledged NUPRC’s commitment to continue providing a level playing field, to reduce uncertainty, and foster ease of doing business.