Unexplored oil wells will soon be re-awarded – Komolafe
The Commission Chief Executive (CCE) of the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), Engr. Gbenga Komolafe, has stated that it has the backing of President Bola Ahmed Tinubu to re-award oil wells not explored. Speaking during the Closing Ceremony for the Execution of the Production Sharing Contract (PSC) With NNPC Limited and the TotalEnergies–Sapetro Consortium […]
The Commission Chief Executive (CCE) of the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), Engr. Gbenga Komolafe, has stated that it has the backing of President Bola Ahmed Tinubu to re-award oil wells not explored.
Speaking during the Closing Ceremony for the Execution of the Production Sharing Contract (PSC) With NNPC Limited and the TotalEnergies–Sapetro Consortium yesterday in Abuja, Komolafe said the inability to utilise oil wells by owners make Nigeria not to be able to fully harness its abundant oil reserve.
“If there is no political support, it becomes difficult. So in this respect, that is why I said that we need to give credit to Mr. President for giving the required political support for the regulator to exercise its powers within the provisions of the Petroleum Industry Act.
And our regulatory direction in that respect has been demonstrated, thus unexplored acreages, non-performing assets, will definitely go into the basket for new bidding.
He explained that the Production Sharing Contract by the companies covered Petroleum Prospecting Licences 2000 and 2001.
He said the offshore asset is spanning about 2,000 square kilometres in the prolific Niger Delta Basin and a direct product of the transparent, competitive, and reform-driven framework introduced under the Petroleum Industry Act 2021 (PIA).
“TotalEnergies with over 60 years operations in Nigeria and holding 80% contractor interest, as well as Sapetro with 30 years operations and holding 20% contractor interest, on your success in the Licensing Round.
On his part, the GCEO of NNPCL, Engr. Bayo Bashir Ojulari, said the offshore assets are amongst NNPCL’s key focus areas as a concession acting on behalf of the federation.
He said the sharing contract is developed in compliance with Section 85 of the PIA and Regulation 23.1 of the Petroleum Licensing Rounds Regulation 2024.
He disclosed that the project is the first with robust gas terms, including a profit gas split that incentivizes monetization of non-associated gas.
He said, “The PSC has robust fiscal terms. One, a signature bonus of $10m, production bonus of 2 million barrels and 4 million or cash equivalent on attainment of 35 million barrels and 100 million barrels production respectively. So there is an incentive for performance, which we think is very good.”
“A crude profit oil split based on cumulative production. A gas profit split based on cumulative associated gas sales, not just production. Cost per limit of 70% ensures that there is continuous flow of production funds into the Federation.”