Nigeria to revise terms at Shell's Bonga field

Nov 02, 2007 01:00 AM

Nigeria plans to alter terms at Royal Dutch Shell deepwater Bonga field next year when the contract comes up for revision, a Nigerian oil official said.
Tony Chukwueke, head of Nigeria's Department of Petroleum Resources, said that the Bonga concession -- originally awarded under a production-sharing contract to Shell in 1993 and operated in partnership with Esso -- a unit of ExxonMobil, ENI’s Agip and France's Total/Elf -- had a provision allowing for terms to be revised after 15 years if oil prices rose above $ 20 a barrel.

"The government is actually giving notice," that the government will call upon that provision in 2008, Chukwueke told on the sidelines of an oil conference in Cape Town, South Africa. Comments by Nigerian officials in recent days have suggested the government intends to renegotiate oil contracts with foreign oil companies but it was unclear what kind of changes was planned.
Chukwueke said only production-sharing contracts from Nigeria's first deepwater licensing round in 1993, namely the Bonga concession, would be affected.
"Only those from 1993 are affected," he said.

Chukwueke said the fiscal terms of joint ventures between the state oil firm, the Nigerian National Petroleum Corporation, and companies like Shell and ExxonMobil would not change. However, the government will seek to give the NNPC a greater operational role in those joint ventures, Chukwueke said.
Planned reforms in the country's oil sector were aiming to shed the national oil company's role as a mere financier of projects and "turn NNPC into an operator," Chukwueke said.

Asked if that would alter the companies' take of profits, Chukwueke said, "No. What will happen is the NNPC will be liable to pay royalty and taxes just like Shell," on the portion of oil it produces.
With the reforms, the NNPC will "no longer be an onlooker... and be more in the driver's seat," Chukwueke said.
Earlier, Chukwueke said in a speech at the conference that Nigeria was "looking for new players" and was "getting tired of the Shells and Exxons."
"We'd like to encourage the small independents," he said.

Source: Dow Jones & Company
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