NNPC and Elf Petroleum Nigeria sign oil drilling agreement

The Nigerian National Petroleum Corporation (NNPC) and Elf Petroleum Nigeria on 18 July in Abuja signed a memorandum of understanding for the take-off of the drilling exercise of Oil Prospecting License (OPL) 223 conceded to the company in 2003.
The terms of the Production Sharing Contract (PSC) include the following:
-- Total will pay $ 7.6 mm as signature bonus in two tranches of $ 3 mm immediately and another $ 4.6 mm in 90 days.
-- It will later pay $ 10 mm after striking first oil in the development stage of the field.
-- As concessionaire, NNPC holds 30 % equity interest on behalf of the government while Total, as operator, holds 70 % interest in the block.
-- Total bears the risk and funding of exploration and development of the field while the government will benefit, if oil is discovered.
-- The concession is for a 30-year period.

Petroleum Resources Minister of State, Dr Edmund Daukoru, and the Managing Director, Elf Petroleum Nigeria Limited (EPNL), Mr Jacques Marraud des Grottes signed the agreement on behalf of NNPC and Total respectively. Already, a management committee has been constituted to oversee the affairs of the block. Its membership is drawn from the Nigerian Petroleum Development Company (NPDC) and Total.
The NPDC is the exploration and production arm of the NNPC while EPNL is the upstream arm of Total in Nigeria.

Both Dr Daukoru and Mr Des Grottes described OPL 223 as holding high discovery potential.
Other dignitaries present at the signing ceremony include the Group Managing Director (GMD), NNPC, Mr Funso Kupolokun and the Presidential Assistant on Petroleum and Energy Matters, Alhaji Ja'afaru Kpaki.