Three oil firms win production sharing contract with Nigeria

The Nigerian Federal Government and three multinational oil concerns in Abuja signed a Production Sharing Contract. The three companies which signed the contract with the NNPC were Chevron Nigeria Deepwater, Shell Nigeria Offshore Prospecting and Brasoil Oil Services Nigeria.
The production sharing contract which is principally for OPL 250 has Chevron Nigeria Deepwater, an affiliate of Chevron Nigeria getting 50 %. It also has the operator status. Shell Nigeria Offshore Prospecting, an affiliate of Shell Petroleum Development Company of Nigeria (SPDC), won 35 % while the third company, Brasoil Oil Services Nigeria, an affiliate of Petrobras Nigeria, clinched 15 %.
The contract has a duration of 30 years. The oil Prospecting Lease part of the contract would however last for 10 years while the Oil Mining Licence content would be valid for 20 years. All the OPL and OML are to be issued in the name of NNPC.

The Presidential Adviser on Petroleum, Dr. Rilwanu Lukman, said at the occasion that "consequent upon the 2000 Bidding round which were based on a fair and transparent process, a number of multinational companies and indigenous companies were selected as production sharing contractors who would enter into production sharing contracts with NNPC for OPLs."
The Chairman/Managing Director of Chevron, Mr. Ray Wilcox, who spoke on behalf of the CEOs of other companies, Ron Van de Berg of Shell, Samir Awad of Brasoil, said the occasion was one of the most anticipated events in the last one month. "It is an event we have been looking forward to ourselves." But the road to the agreement did not come easy as the Group Managing Director of NNPC, Mr. Jackson Gaius-Obaseki, said it took the parties so long and negotiations difficult because "we have problems operating what we have." He however described the agreement as a victory for the industry.

Wilcox said the vision envisaged in the Production sharing contract would be mutually beneficial to all the partners. He described the process by which the winners emerged as transparent, rigorous and robust adding that the results of their exploration would however take sometime to mature. "The vision is mutually beneficial for all the parties. The end of the (bidding) process is the beginning of another," he declared.
Explaining that the development of oil and gas was critical for the future of Nigeria, the Chevron CEO said his company, along with other partners, had an "obligation to deliver using the best approaches, best technologies possible to get the best possible returns for each of the partners."