Olusola Bello
The execution of agreements between Nigerian National Petroleum Corporation (NNPC) and four major international oil companies led by Shell Nigeria Exploration and Production Company (SNEPCO), which resulted in the renewal of Oil Mining Lease (OML) 118 for another 20 years, no doubts brings huge economic values to the country.
According some industry operators, this is absolutely good news for the industry with huge economic benefits to the country expected from there.
Dr. Eddy Wikina, former External Affairs Relations Manager of SNEPCO said: “This project Bonga South West has been conceived following the great success of the trail blazing Bonga deepwater project. In fact by the time I retired in 2008, SNEPCO had already started to lay foundation for further development in OML 118.”
He said the long delay arising from disputes over the PSC and fiscal terms has cost the company and government millions in early revenue that would have gone to boost economic development.
He advised that the Federal Government should do well to avoid stagnating the economy and take bold steps to address all fiscal issues, listen to the operators and pass the enabling bill.
He said there is general belief that fossil fuels will become less of an energy source in the next 30 to 50years, as the world drives towards more renewable sources to reduce global warming. Consequently, it makes sense to increase production from such large crude oil reserves quickly, and apply the revenue to other areas of economic growth and demand for sustainability.
The benefits to be derived from this include hundreds of jobs to be created, transfer of technology, increased opportunities for local content input, and revenue for government. It’s better late than never.
The five agreements signed include, Dispute Settlement Agreement, Settlement Agreement, Historical Gas Agreement, Escrow Agreement and Renewed PSC Agreement.
Abiodun Adesanya, managing Consultant and chief executive officer, Degeconek ,he said, the it was a good development as this has been the result of a very long negotiations between the NNPC and its partners on the field. He hopes that this move would affect the development of Bonga South West positively. “This is because Bonga South West is a sizeable field and hope the development would be faster.”
The executions of the agreements according to the chief executive officer of Degeconek means another projects is in the offing, people would be hired, employments would be guaranty.
He however wished that there would not be a disproportional cost recovery so that the government would be able to get good revenues from the projects. The overall benefits of the project to Nigeria he stated, is substantial.
Mele Kyari, NNPC boss said the agreements indicates “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 from over $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.