NNPC, TotalEnergies, Sapetro ink landmark deepwater production sharing contract to boost local content
Abdullateef Fowewe
The Nigerian National Petroleum Company (NNPC) Ltd, in partnership with TotalEnergies and South Atlantic Petroleum Limited (Sapetro), has executed a historic Production Sharing Contract (PSC) for Petroleum Prospecting Licences (PPLs) 2000 and 2001.
As revealed in a statement obtained from NNPC, this landmark PSC, the first of its kind in Nigeria to comprehensively cover both crude oil and natural gas exploration and production in deepwater blocks, signifies a pivotal moment in the country’s upstream oil and gas sector.
The signing ceremony, held at the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) Headquarters in Abuja, marks a major milestone in the Federal Government’s ongoing efforts to responsibly develop Nigeria’s vast hydrocarbon resources and enhance energy security.
Bashir Bayo Ojulari, Group Chief Executive Officer of NNPC Ltd., described the event as “unique in many respects,” highlighting that “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 further underscored that the signing is “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.”
Ojulari pledged NNPC Ltd.’s commitment to leveraging these partnerships to deepen upstream operations using cutting-edge technology and high operational standards to ensure commercial viability and sustainability.
Gbenga Komolafe, Chief Commissioner Executive of NUPRC, applauded the transparent and competitive framework introduced under the PIA 2021, noting that the award of the two offshore blocks spanning about 2,000 square kilometres “is a direct product of the reform-driven framework.”
He also acknowledged the commitment of NNPC Ltd., TotalEnergies (holding 80% interest), and Sapetro (holding 20%) to exploration and production, citing their success with previous projects such as Egina and Akpo.
The Managing Director and CEO of TotalEnergies E&P Nigeria Limited, Matthieu Bouyer, reaffirmed the company’s long-standing commitment to Nigeria, stating, “The signing of these blocks represents the first international oil company (IOC) to secure such deepwater assets in over 10 years, awarded through an open and transparent bid process.”
Sapetro’s Managing Director, Chukwuemeke Anagbogu, expressed delight in the partnership and alignment with the Government’s vision, saying the PSC “reaffirms Sapetro’s alignment with the Government’s vision for responsible resource utilisation, local content advancement, and inclusive economic progress.”
He added that the blocks “provide a clear path to increasing reserves and assuring long-term production growth,” which will sustain value creation for shareholders, stakeholders, and the nation.
The PSC includes provisions for signature and production bonuses, minimum work programmes with performance guarantees, cost recovery and profit-sharing rules, royalties and taxes, gas utilisation bans on flaring, and obligations related to decommissioning, environmental remediation, and host community development—all in strict accordance with the Petroleum Industry Act.
