NNPC acquires oil blocks and gas supply deal from Equatorial Guinea

Dec 12, 2006 01:00 AM

The Nigerian National Petroleum Corporation (NNPC) has announced that its operations have gone international with its acquisition of two oil blocks from the open oil acreage of Equatorial Guinea (EG), with the addition of a daily gas supply deal of 800 mm cf.
Meanwhile, Equatorial Guinea has applauded the development, saying it is a big victory for the spirit of the New Partnership for African Development (NEPAD).

Dr Funsho Kupolokun, the Group Managing Director (GMD) of the NNPC made the disclosure at the signing ceremony of the Heads of Agreement for the Promotion of Economic Relationship between both countries.
“There are three aspects to the agreement, the first is supply of 600–800 mm cfpd, of natural gas to EG Liquefied Natural Gas (LNG) Train 2 in which NNPC will source the gas from the NNPC/Mobile joint venture to meet this requirement, subject to its commercial viability,” he said. “The second aspect is the allocation of oil blocks to NNPC in EG open acreage,” he added.

He disclosed that blocks AJ and B12 have been allocated to NNPC for which NPDC would be the contractor and that the Corporation would also apply for a third block, noting however, that this would be through another licensing round.
“The third aspect is capacity building for EG personnel in the oil industry,” an elated Kupolokun said. “As soon as the Head of Agreement is signed, both parties will set up commercial deals to now negotiate all these commercial agreements. The import of this is that, we will be participating in EG LNG and at the same time, NNPC will now open another office in EG to work on some oil blocks. Essentially, NNPC is going international.”

“Indeed, closer cooperation with other African governments is a cardinal foreign policy of this Administration, this has been clearly demonstrated in the West African Gas Pipeline Project (WAGP), due to be commissioned in February 2007, where Nigeria is not only supplying all the gas required to the countries in the region, but also participating inthe pipeline company itself.”
“A similar cooperation with Algeria is under study for the Trans-Sahara Gas pipeline Project,” he added.

The GMD said that gas supply to EGLNG is part of a national policy of aggressively developing and monetising Nigeria’s abundant natural gas reserves, and to have a portfolio of natural gas and light sweet crude oil exports for a world demanding cleaner burning, low carbon dioxide emission fuels, because of environmental pollution and global warming.
“Indeed, two Greenfield LNG projects, the OKLNG, along with Brass LNG and the already operational NLNG, are the three LNG projects that will enable us largely achieve the above-stated objectives. In addition to these, there is the Gas-to-Liquids Project at Escravos (EGTL). It is therefore our desire to be part of the success story of EGLNG,” he said.

He told the audience that the NNPC is also currently pursuing aggressively a local content policy, which aims at increasing the participation of Nigerian companies and human resources in all areas of the petroleum industry.
“Indeed, we aim to achieve an overall local content value of 45 % by the end of this year, and 70 % by 2010. We have recorded significant success in this policy, and it is our intention to share experiences in this regard with EG,” he said. “From the foregoing, it can be seen that the proposed cooperation between our two organisations brings wide-ranging, far-reaching, long-term benefits and opportunities to both countries. It will also be a project of which the both partners can be proud of, not only because of the good financial returns that they will earn from it, but also because it will tremendously enhance their corporate image as a result of the social benefits and industrial excellence of the project,” he said.

The Minister of Mines, Industry & Energy of the Republic of Equatorial Guinea, Atanasio Ela Ntugu told his host that the signing of the agreement is an expression of the seriousness with which the President of EG, Teodoro Obiang Nguema Mbaso and President Olusegun Obasanjo of Nigeria hold the principle of African integration and the NEPAD.
He expressed optimism that the deal will be of immense benefit to the two countries.

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