NUPRC Signs Landmark Deal With NNPCL, TotalEnergies, Sapetro To Unlock Over 100 Million Barrels Of Crude

…PSC Deal Signals New Era For Deepwater Oil Exploration

…Reforms Under Tinubu’s Administration Attracting Major Investments—NNPCL

… New PSC To Boost Energy Security, Decarbonisation, Job Creation

In a landmark move for Nigeria’s oil and gas sector, the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) has concluded the execution of a Production Sharing Contract (PSC) with TotalEnergies and South Atlantic Petroleum (Sapetro) for Petroleum Prospecting Licences (PPLs) 2000 and 2001.

The agreement was signed at a formal closing ceremony in Abuja, marking the beginning of a new phase of deepwater exploration and investment in the Niger Delta Basin.

The offshore blocks span over 2,000 square kilometres and were awarded through the 2024 Licensing Round.

Delivering the keynote address, Chief Executive of NUPRC, Engr. Gbenga Komolafe described the signing as more than a ceremonial event, calling it a pivotal moment for the sector and the economy at large.

Komolafe stated, “Today is not just about signing documents; it is about laying the foundation for a future of energy security, investment inflow, and shared prosperity.”

TotalEnergies, which holds an 80 per cent contractor interest, and Sapetro, with a 20 per cent interest, emerged successful in what Komolafe described as a “fair, transparent, and competitive bidding process in line with Section 73 of the PIA.”

He acknowledged the long-standing presence of both companies in Nigeria, with TotalEnergies operating in the country for over 60 years and Sapetro for 30 years.

The award, he emphasised, is a direct result of the transparent, reform-driven framework introduced under the Petroleum Industry Act (PIA) 2021.

Komolafe paid glowing tributes to President Bola Tinubu for his transformative leadership in the sector, citing his decisive reforms and strategic directives that have repositioned Nigeria as a viable investment destination.

He highlighted Executive Orders 40, 41, and 42 focused on fiscal incentives, local content enhancement, and contract efficiency, respectively as key enablers of the current investment boom.

“The awardees of PPLs 2000 and 2001 have clearly become beneficiaries of the laudable initiatives of Mr. President,” he said. “We therefore urge TotalEnergies and other potential investors to take advantage of the enabling fiscal, regulatory, and governance regime in participating in the next licensing round.”

The PSC, developed using a newly standardised template in line with the PIA, lays out clear, fair, and commercially viable terms.

These include the payment of signature bonuses and production bonuses tied to commercial milestones, ensuring value to the federation.

A defined minimum work programme is also included, backed by performance guarantees.

Additionally, the contract sets transparent rules for cost recovery and profit oil sharing, as stipulated under the fiscal provisions of the PIA.

Komolafe further noted that the contractors are expected to comply with royalty and tax payments, fulfil obligations to host community development, and align operations with the country’s gas commercialisation objectives.

This includes the treatment of associated and non-associated gas to reduce flaring and ensure optimal utilisation.

Environmental responsibilities were also emphasised, with decommissioning and abandonment plans and contributions to the Environmental Remediation Fund included to ensure transparency, accountability, and environmental protection.

“These terms provide certainty for investors, fairness for the Federation, and clarity for all parties,” Komolafe said.

“We have implicit confidence in TotalEnergies and partners to fulfill these terms within the allowed windows for mutual benefit.”

Reflecting on the challenges encountered during the 2024 Licensing Round, Komolafe noted that attracting investors was not without difficulty.

However, with presidential approval, he said the commission implemented a pragmatic solution by introducing minimum signature bonuses as consideration for asset awards.

This move, he explained, brought Nigeria in line with international best practices, following the example of countries such as Thailand, Israel, Guyana, and Brazil, which have shifted away from heavy front-loaded bonuses to more investor-friendly models.

“This helped attract serious investors without front-loading financial burdens,” he added.

He commended the technical and legal teams from NUPRC, NNPC Limited, and the TotalEnergies–Sapetro Consortium for their professionalism and collaborative spirit throughout the negotiation process.

Their diligence, he said, exemplifies the kind of excellence the Commission seeks to institutionalize across the sector.

To the contractors, Komolafe offered a message of both encouragement and expectation. “You are not just investing in Nigeria and our people,” he said, “but in global energy security and in your own bottom line.

“We expect swift implementation of the agreed work programme and strict adherence to decarbonisation principles.”

He urged the companies to create quality jobs, empower Nigerian businesses, and prioritize sustainability in line with the PIA’s host community provisions.

He concluded with a strong reaffirmation of the Commission’s commitment to its regulatory mandate.

“As a regulator, we remain steadfast in our mandate to enable, promote, and regulate the Nigerian upstream oil and gas sector in a transparent and accountable manner.

We will continue to provide a level playing field, reduce uncertainty, and foster ease of doing business.”

Komolafe stated that the successful execution of this PSC demonstrates Nigeria’s readiness for investment and its strategic positioning in the global energy landscape.

“The successful execution of this PSC, in alignment with the principles of the PIA, reaffirms that Nigeria is open for business, ready for investment, and committed to leadership in the global energy space,” he declared.

Also speaking at the event, the Group Chief Executive Officer of NNPC Ltd, Bashir Ojulari emphasised the importance of the PSC, highlighting it as a key focus area for NNPC and Total Energies.

He said the PSC was developed in compliance with Section 85 of the PIA and Regulation 23 of the Petroleum Licensing Round Regulation 2022.

The NNPCL Boss noted that the PSC comprehensively covers both crude oil and natural gas, with robust gas terms that incentivise the monetisation of non-associated gas.

He added that the PSC is framed to reflect the nuances of the PIA, the robust multifaceted role of the Commission, and the governance and oversight of the concessionaire.

He said the PSC has robust fiscal terms, including a signature bonus of $10m, a production bonus of two million barrels, and cash equivalents on attainment of 35 million and 100 million barrels.

According to him, these terms enhance the predictability of the PSC while ensuring a good return on investment for the contractor.

The Managing Director of TotalEnergies, Mr Mathieu Bouyer emphasised Total Energies’ commitment to Nigeria, highlighting their presence for over 60 years.

He outlines the company’s plans to progress swiftly and responsibly with the implementation of the agreed work program, noting that Total is actively working towards spudding its first well on the blocks in the shortest possible time frame.

He expressed the commitment of the partners to deliver results that will benefit all stakeholders, reinforcing Nigeria’s content, creating jobs, and generating value for the country and its people.

Ifeanyi ONUBA and Christiana JEREMIAH

NUPRC Signs Landmark Deal With NNPCL, TotalEnergies, Sapetro To Unlock Over 100 Million Barrels Of Crude is first published on The Whistler Newspaper