…  PSC to comprehensively cover crude oil, natural gas exploration & production

Oredola Adeola

The Nigerian National Petroleum Company (NNPC) Ltd, in partnership with the TotalEnergies–Sapetro Consortium, has executed a Production Sharing Contract (PSC) for Petroleum Prospecting Licences (PPLs) 2000 and 2001, marking the first under the Petroleum Industry Act (PIA) to cover both crude oil and natural gas exploration and production.

The PSC signing ceremony was among all the parties was held at the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) Headquarters in Abuja on Monday.

Advisors Reports gathered that, the PSC for Petroleum Prospecting Licences (PPLs) 2000 and 2001 is the first out of the seven deep offshore PPL blocks awarded in the 2024 licensing round, to be officially executed under the Petroleum Industry Act (PIA).

Engr. Bayo Ojulari, Group Chief Executive Officer (GCEO) of NNPC Ltd.,in his remark during the ceremony noted that the significant event represents the first of its kind with high-impact prospects that will improve energy security and drive Nigeria’s economic growth.

He said, “This particular PSC is unique in many respects. It is the first PSC that comprehensively covers its scope, both crude oil and natural gas.

“It is the first PSC with robust gas terms including a profit gas fleet that incentivises monetisation of non-associated gas,” he stated.

The GCEO highlighted that the ceremony as not merely a contract signing, but a powerful testament to the success of the Petroleum Industry Act (PIA) 2021 and a clear signal to the global investment community that Nigeria is indeed poised for business.

Engr. Ojulari emphasised NNPC Ltd.’s commitment to leveraging such partnerships and expertise in deepening upstream operations to surpass the successes achieved in previous deepwater projects, by applying cutting-edge technology and high operational standards to ensure commercial viability and sustainability.

Engr. Gbenga Komolafe, CCE of NUPRC, said the award of the two offshore blocks, spanning about 2,000 square kilometres, is a direct product of transparent, competitive, and reform-driven framework introduced under the PIA 2021.

He also commended NNPC Ltd. and the contractors; TotalEnergies (holding 80% interest) and Sapetro (holding 20% interest), for their commitment to exploration and production activities in the Country, citing success in previous assets such as Egina and Akpo.

Mr. Matthieu Bouyer, Managing Director/Chief Executive Officer of TotalEnergies E&P Nigeria Limited, described the signing as a reaffirmation of TotalEnergies’ deep and enduring commitment to Nigeria, where the company has operated for over 60 years.

Bouyer further stated that the blocks, awarded through an open and transparent bid process, represent the first international oil company (IOC) to secure such deepwater assets in over 10 years.

Mr. Chukwuemeke Anagbogu, Managing Director of South Atlantic Petroleum Limited (Sapetro), noted that the signing reaffirms Sapetro’s alignment with the Government’s vision for responsible resource utilisation, local content advancement, and inclusive economic progress.

Anagbogu added that the blocks provide a clear path to increasing reserves and assuring long-term production growth, playing a vital role in sustaining value creation for shareholders, stakeholders, and the nation.

Advisors Reports further gathered that the PSC includes provisions for signature and production bonuses, a defined minimum work programme with performance guarantees, cost recovery and profit-sharing rules.

It also includes royalties and taxes, gas utilisation to reduce flaring, and obligations for decommissioning, environmental remediation, and host community development; all in line with the PIA.