Page 10 - AfrOil Week 30

AfrOil polICy AfrOil
NNPC pushes cash call financing
nIgERIA
NIGERIAN National Petroleum Corp. (NNPC), under its new administration, has given assur- ances on cash call arrears to Eni, in addition to setting out a plan for new investments in OML 13 with sterling Oil Exploration and Energy Pro- duction Co. (sEEPCo).
NNPC, in a statement following talks with Eni and its local Agip subsidiary, said the fail- ure to pay cash call arrears was a deliberate step. “ e money is there, it is ready. We will pay as soon as the issues are resolved by the end of the week”, NNPC’s new head, Mele Kyari, stated. He was holding talks with Eni’s vice chairman for sub-saharan Africa, Brusco Guido.
At the heart of the issue appears to be a dispute over the validity of certain unidenti ed licences. Eni continues to produce from these blocks, but the NNPC head said these licences had expired. Kyari said the government intended to transfer these to the Nigerian Petroleum Development Co. (NPDC), NNPC’s upstream subsidiary.
Kyari also acknowledged problems related to payments for the Okpai independent power plant (IPP). e o cial said the cash was there and that the payment would come imminently. “We will work with you. you can
count on us,” he said.
e cash call issues with Eni stand in contrast
to NNPC’s relationship with ExxonMobil. e Nigerian company celebrated the completion of paying o its $833.57mn debt to Mobil Produc- ing Nigeria (MPN) early in July.
NNPC and the foreign companies reached a deal in late 2016. is involved the companies investing in additional production and taking a greater share of the revenues to cover historic debts of $5.1bn. Once these have been covered, as with the MPN deal, more oil – and revenues – ow to NNPC.
More production has also been lined up under an agreement with sEEPCo, announced on July 23. Under the $3.15bn financing and technical services agreement, production is due to begin in 2020, with around 7,900 barrels per day. is will ramp up to 94,000 bpd and 15.35mn cubic metres per day of gas within four years. Royalties and taxes of $10.2bn will ow to the government, while NNPC will earn more than $5bn.
sEEPCo will provide the $3.15bn funding, with a 10-year capital investment period and cost recovery of ve years.™
pRojECts & CompAnIEs
BP signs Gambian JOA
tHE gAmBIA
BP has signed a contract to work on the A1 block, in e Gambia, a licence also claimed by African Petroleum. e UK-based super-major was awarded the block at the end of April.
Gambia National Petroleum Corp. (GNPC) signed a joint operating agreement (JOA) with BP Exploration (Gambia) on July 23. e Gam- bian company said this was the rst time it had signed on as a partner on an oil licence, holding a 10% stake.
signing the JOA was GNPC’s managing director, yaya Barrow, and BP Africa’s new coun- tries vice president, Jonathan Evans. Witnesses included Gambian Minister of Petroleum and Energy Fafa sanyang. The statement said the signing of the deal would involve BP working in earnest to explore the block’s potential.
e JOA was negotiated with support from the Petroleum Negotiation Committee, Africa Legal support Facility (ALsF), Bryan Cave Leighton Paisner (BCLP) and senghore Law Practice.
A report in e Point newspaper said BP was expected to pay a $10.1mn signature bonus. It also reported sanyang as saying an exploration well was required to be drilled within two years.
The Gambia launched plans for a licensing
round in 2016, bringing in the African Develop- ment Bank’s (AfDB) ALsF to provide legal and technical support in July 2017. e plan for the round moved the country away from direct nego- tiations. ALsF went on to retain BCLP and seng- hore, in addition to a representative of the OpenOil movement and technical consultants. e licence round proper was launched in september 2018.
sanyang, commenting in May, said working with the various external actors had provided The Gambia with “the capacity and toolkits needed to independently replicate such a pro- cess with minimal external support”. He also described the contract with BP as providing “better commercial terms then most licences in the region”.
Despite this, African Petroleum contin- ues to maintain its hopes for the A1 licence. In May, the company said it was reserving its rights to the area and that it would continue with its International Centre for settlement of Investment Disputes (ICsID) arbitration on A1. African Petroleum is in the midst of a merger with a Middle East-based company, Petronor E&P, but progress is slow and clos- ing has been repeatedly delayed. is is now expected to come in August.™
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w w w . N E W S B A S E . c o m Week 30 30•July•2019