People & Money

Shell days away from major contractor decision on $10bn deep-water Nigeria project

FPSO bidders on tenterhooks as they await results of bid evaluation for 150,000 bpd Bonga South West-Aparo Scheme, according to Upstream.

Shell is within days of deciding which contractor groups will advance to the next stage of a beauty contest to clinch the coveted Bonga project.

Just a few days ago,the Nigerian National Petroleum Corporation (NNPC) and its Production Sharing Contract (PSC) partners -Shell Nigeria Exploration and Production Company (SNEPCo), Total Exploration and Production Nigeria Limited (TEPNG), Esso Exploration and Production Nigeria Limited (EEPNL) and Nigerian Agip Exploration (NAE)  – have executed agreements to renew Oil Mining Lease (OML) 118 for another 20 years.

The five agreements signed include, Dispute Settlement Agreement, Settlement Agreement, Historical Gas Agreement, Escrow Agreement and Renewed PSC Agreement.

During the signing of the agreements, Mele Kyari, Group Managing Director of the Corporation,  was quoted  as saying that over $10bn of investment would be unlocked as a result of the agreements which  signaled the end of the long-standing disputes over the interpretation of the fiscal terms of the Production Sharing Contracts (PSC) and the emplacement of a clear and fair framework for the development of the huge deep-water assets in Nigeria.

Also Read: Shell Staff Orchestrate Oil Spills to Capture Budgeted Clean Up Funds

According to him, this is an indication of “a renewed confidence between NNPC and her partners; between the Government and the investing communities which include NNPC. It produces value for all of us by providing a clear line of sight for investment in the Bonga bloc of around $10billion.

He disclosed that the deal would yield over $780million in immediate revenues to the Federal Government while it would also free the parties fromover $9billion in contingent liabilities.

“Ultimately, these agreements will engender growth in our country where investment will come in for other assets, not just in the deep-water, but even for new investors. It is an opportunity for them to see that this country is ready for business,” the GMD enthused.

Also speaking at the event, the Country Chair of Shell Companies in Nigeria, Osagie Osunbor, said the OML 118 renewal agreement would remain a watershed in the history of deep-water investments inNigeria, assuring that the giant stride would further bolster investor confidence in the country.

Speaking in a similar vein, the Managing Director of SNEPCo,  Bayo Ojulari, noted that the agreements marked the end of a twelve-year dispute that had marred business relationship and affected trust and investment.

“Today, we have signed agreements that define the future of deep-water for Nigeria. This is the first deep-water block that was developed in Nigeria and it is also the first one that we are resolving all the disputes that will lay the foundation for the resolution of other PSCs,” the SNEPCo helmsman stated.

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