NNPC, TotalEnergies sign PSC agreement for deepwater blocks

The Nigerian National Petroleum Company Limited (NNPC Ltd), in partnership with the TotalEnergies–Sapetro Consortium, has executed a Production Sharing Contract (PSC) for Petroleum Prospecting Licences (PPLs) 2000 and 2001.

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The NNPC Ltd in a statement on Monday night, said this marks a significant milestone in Nigeria’s upstream oil and gas sector.

The state-owned oil company explained that the contract is the first to comprehensively cover both crude oil and natural gas exploration and production.

The event, which took place at the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) Headquarters in Abuja on Monday, according to the statement, signifies a major milestone in the federal government’s efforts to harness Nigeria’s vast hydrocarbon resources responsibly and profitably.

Group Chief Executive Officer of NNPC Ltd, Bayo Ojulari, noted that the significant event represents the first of its kind with high-impact prospects that will improve energy security and drive Nigeria’s economic growth.

“This particular PSC is unique in many respects. It is the first PSC that comprehensively covers its scope, both crude oil and natural gas. It is the first PSC with robust gas terms including a profit gas fleet that incentivises monetisation of non-associated gas,” he stated.

He highlighted that the ceremony was not merely a contract signing, but a powerful testament to the success of the Petroleum Industry Act (PIA) 2021 and a clear signal to the global investment community that Nigeria is indeed poised for business.

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Mr Ojulari emphasised NNPC Ltd’s commitment to leveraging such partnerships and expertise in deepening upstream operations to surpass the successes achieved in previous deepwater projects, by applying cutting-edge technology and high operational standards to ensure commercial viability and sustainability.

Also speaking, the NUPRC Chief Executive, Gbenga Komolafe, said the award of the two offshore blocks, spanning about 2,000 square kilometres, is a direct product of a transparent, competitive, and reform-driven framework introduced under the PIA 2021.

He also commended NNPC Ltd and the contractors, TotalEnergies (holding 80 per cent interest) and Sapetro (holding 20 per cent interest), for their commitment to exploration and production activities in the country, citing success in previous assets such as Egina and Akpo.

In his remarks, Managing Director/Chief Executive Officer of TotalEnergies E&P Nigeria Limited, Matthieu Bouyer, described the signing as a reaffirmation of TotalEnergies’ deep and enduring commitment to Nigeria, where the company has operated for over 60 years.

Mr Bouyer stated that the blocks, awarded through an open and transparent bid process, represent the first international oil company (IOC) to secure such deepwater assets in over 10 years.

The Managing Director of South Atlantic Petroleum Limited (Sapetro), Chukwuemeke Anagbogu, expressed his delight in the partnership, noting that the signing reaffirms Sapetro’s alignment with the government’s vision for responsible resource utilisation, local content advancement, and inclusive economic progress.

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He added that the blocks provide a clear path to increasing reserves and assuring long-term production growth, playing a vital role in sustaining value creation for shareholders, stakeholders, and the nation.

According to the statement, the PSC includes provisions for signature and production bonuses, a defined minimum work programme with performance guarantees, cost recovery and profit-sharing rules, royalties and taxes, gas utilisation to reduce flaring, and obligations for decommissioning, environmental remediation, and host community development; all in line with the PIA.