By Adedapo Adesanya
The Nigeria National Petroleum Corporation (NNPC) alongside China’s CNOOC Limited and South Atlantic Petroleum (SAPETRO) has signed a preliminary agreement to resolve a dispute over Oil Mining Lease (OML) 130.
The disclosure was made by the national oil, which explained that the signing happened on Thursday and was led by the Group Managing Director, NNPC, Mr Mele Kyari, with representatives from both firms.
NNPC said on its official Twitter account that it signed a Heads of Terms (a non-binding broad outline of a deal) with the Chinese and Nigerian firms that seek to address disagreements over the mining lease’s production sharing contract.
It, however, did not provide details of the dispute neither was the new proposed terms disclosed.
In 2006, CNOOC Limited, together with its subsidiaries, signed a definitive agreement with SAPETRO to acquire a 45 per cent working interest in an offshore OML 130 in Nigeria for $2.268 billion, subject to adjustments. The purchase was funded from the internal resources of CNOOC Limited.
OML 130 is covered by both a Production Sharing Agreement (PSA) and a Production Sharing Contract (PSC), each of which governs a 50 per cent interest in OML 130.
SAPETRO was then the sole contractor and 100 per cent interest holder in the PSC. Under the agreement, CNOOC acquired a 90 per cent interest in the PSC and then a 45 per cent working interest in OML 130.
Located in the Niger Delta region, it is one of the world’s most prolific oil and gas basins. OML 130 covers an area of approximately 500 square miles in the Niger Delta and is a deep-water block with water depths ranging around 1,100 m to 1,800 m.
It contains the Akpo field, which was discovered in 2000. Besides Akpo, OML 130 contains three other significant discoveries Egina, Egina South and Preowei. The block also contains a range of further exploration prospects.
Akpo’s P50 liquid recoverable volumes were estimated by Total, the operator of OML 130, to be approximately 600 million barrels with potential for additional P50 recoverable oil in excess of 500 million barrels for the whole OML130 area.
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