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Shell Petroleum Development Company has advised that the parties involved in the new cash call arrangement should keep to the agreement as failing to do so may spell disaster not only for the industry, but also for the economy.
Osagie Osunbor, country chair and managing directors of SPDC asked the parties in the new joint venture agreement to keep faith with the letters of the agreement as that could lead to more investment from the international oil companies.
According to him, there would be a lot of confidence by the international oil companies, stating that the $15 billion the company wants to invest is underpinned by confidence the company has in the country
The Shell boss who spoke on the sideline of a meeting in Lagos said that the Nigerian National Petroleum Corporation (NNPC) has largely kept faith with the agreement so far would soon begin to flow into the oil and gas industry.
The federal Government initially paid $400million out of the 1.5 billion owed the international oil companies. This was however different from the discounted $6.8 billion cash call arrears which cover over five years to international oil companies but which the government was able to trim down to $5.1 billion. This $5.1 billion is to be paid off over a five year period through incremental production, not from existing production.
The companies involved are ExxonMobil, Chevron, Shell, Total and Nigeria Agip.
The minister of State for Petroleum Resources, Ibe kachilwu had said that the country’s oil production could increase by 700,000 barrels per day this year.
Meanwhile Shell says it is committed to further unlocking Nigeria’s deep-water resources and along with its co-venture and government partners is evaluating opportunities to further increase production of the Bonga field in an efficient and cost-effective way.
One such opportunity is the Bonga South West/ Aparo (BSWA) Project. In June 2017 SNEPCo, a subsidiary of Shell organised multi-stakeholder local content workshops on the potential opportunities the project may bring to Nigerian service providers. This was in fulfilment of mandatory requirements by the Nigeria Content Development and Monitoring Board. A decision on progressing the BSWA project is currently being awaited.
SNEPCo is also a co-venture partner in the Erha field, which is operated by the ExxonMobil subsidiary Esso Exploration and Production Nigeria (Deepwater) Limited. Located 140 km offshore in the Gulf of Guinea at water depths of between 1,200 and 1,800 metres, production commenced in 2006. The Erha FPSO has a production capacity of 210,000 barrels of oil per day. In recent years, the field has expanded production with both the North Phase 2 and 3 projects coming on stream ahead of schedule in 2015 and 2017 respectively.
Olusola Bello
