By Charles Pemu The Nigerian National Petroleum Company Limited (NNPCL) and the TotalEnergies-Sapetro Consortium have signed a Production Sharing Contract (PSC) for two offshore oil blocks, Oil Prospecting Licences (OPL) 2000 and 2001, in the Niger Delta Basin. The deal, which covers both crude oil and natural gas, includes a $10 million signature bonus.
The signing ceremony took place at the headquarters of the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) on Monday. Engr. Gbenga Komolafe, the Commission’s Chief Executive, hailed the agreement as a significant milestone for Nigeria’s oil and gas sector. He encouraged investors to take advantage of the stable regulatory and fiscal environment established by the Petroleum Industry Act (PIA) of 2021.
Komolafe noted that the award of the two blocks, which span approximately 2,000 square kilometers, was the result of a “fair, transparent, and competitive bidding process” mandated by the PIA. He congratulated TotalEnergies and Sapetro on their successful bid.
NNPCL Group Chief Executive Officer, Engr. Bayo Ojulari, stated that the company, as the concessionaire, will support the consortium to ensure the project’s timely execution. Ojulari affirmed NNPCL’s commitment to boosting Nigeria’s crude oil output to three million barrels per day and attracting $60 billion in investments by 2030.
Ojulari highlighted the robust financial terms of the new PSC, which he said addresses previous contractual shortcomings. The terms include a $10 million signature bonus, a production bonus of two million barrels, and an additional bonus of four million barrels upon reaching specified production milestones. He emphasized that the deal ensures a steady revenue stream for the Federation, with a cost recovery cap of 70%.
“This PSC is a major milestone that underscores the regulator’s commitment to implementing the PIA,” Ojulari said, adding that it brings NNPCL closer to its production and investment targets.
In their separate remarks, the Managing Director of TotalEnergies, Mr. Matthieu Bouyer, and Sapetro’s Managing Director, Mr. Chukwuemeke Anagbogu, praised Nigeria for successfully concluding the 2024 oil licensing round the first under the PIA. Bouyer called it a “big success” and a sign that Nigeria is creating the right conditions to attract investors.
Anagbogu described the new licenses as “strategically important” for ensuring long-term production growth and increasing the country’s reserves. He added that the investment reaffirms their commitment to responsible resource development and local content advancement.