The Nigerian National Petroleum Company (NNPC) Ltd, in partnership with the TotalEnergies–Sapetro Consortium, has executed a Production Sharing Contract (PSC) for Petroleum Prospecting Licences (PPLs) 2000 and 2001.
The development marks a significant milestone in Nigeria’s upstream oil and gas sector as the first of such PSC to comprehensively cover both crude oil and natural gas exploration and production.
Group Chief Executive Officer (GCEO) of NNPC Ltd, Engr. Bashir Bayo Ojulari, noted that the significant event represents the first of its kind with high-impact prospects that will improve energy security and drive Nigeria’s economic growth.
“This particular PSC is unique in many respects. 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 incentivizes monetisation of non-associated gas,” he stated.
He highlighted that the ceremony as 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.
He emphasized NNPC Ltd’s commitment to leveraging such partnership and expertise in deepening upstream operations to surpass the successes achieved in previous deepwater projects, by applying cutting-edge technology and high operational standards to ensure commercial viability and sustainability.
In his remarks, Engr. Gbenga Komolafe, CCE of NUPRC, hailed the event as a pivotal moment for Nigeria’s energy sector. “Today is not just about signing documents; it is about laying the foundation for new exploration and investment,” Komolafe stated.
He emphasized that the PSC signals the start of a robust work program aimed at unlocking untapped geological potential, expanding reserves, boosting production, and strengthening Nigeria’s energy security.
Komolafe commended President Tinubu’s bold reforms, particularly the 2024 Executive Orders on fiscal incentives, local content, and cost efficiency, which he said, have catalyzed significant investment inflows, stressing that the reforms, coupled with the PIA’s transparent framework, enabled the successful award of PPL 2000 and 2001.
He urged TotalEnergies and other investors to seize opportunities in future licensing rounds, leveraging Nigeria’s investor-friendly regulatory and fiscal environment.
Komolafe said the newly standardized PSC template, developed collaboratively by NUPRC and NNPC Limited, reflects the PIA’s principles of clarity, consistency, and fairness.
According to him, key terms include a signature bonus, production bonuses tied to commercial milestones, a defined minimum work program with performance guarantees, and clear rules on cost recovery, profit oil sharing, royalties, and taxes.
He noted that the contract also emphasizes environmental stewardship through provisions for gas utilization, reduced flaring, decommissioning, and an Environmental Remediation Fund, alongside strict compliance with host community development obligations.
Komolafe commended the technical and legal teams of NUPRC, NNPC Limited, and the TotalEnergies-Sapetro Consortium for their professionalism during negotiations.
He also noted that the adoption of minimal signature bonuses, approved by President Tinubu, aligned Nigeria with global best practices, as seen in countries like Thailand, Guyana, and Brazil, making the 2024 Licensing Round attractive to investors.
Addressing TotalEnergies and Sapetro, Komolafe expressed confidence in their operational excellence, citing their successful track record with assets like Egina and Akpo.
He urged the consortium to prioritize swift exploration, early Final Investment Decisions, and adherence to decarbonization principles.
“You are not just investing in Nigeria and our people, but also in global energy security,” he said, emphasizing the need for local content development, job creation, and sustainable practices in line with the PIA.
Komolafe reiterated NUPRC’s mandate to regulate the upstream sector transparently, reduce uncertainty, and foster ease of doing business.
“This is a historic moment that positions Nigeria as a premier destination for upstream investment in Africa,” he added.
Managing Director/Chief Executive Officer of TotalEnergies E&P Nigeria Limited, Mr. Matthieu Bouyer, described the signing as a reaffirmation of TotalEnergies’ deep and enduring commitment to Nigeria, where the company has operated for over 60 years.
Bouyer stated that the blocks, awarded through an open and transparent bid process, represent the first International oil company (IOC) to secure such deepwater assets in over 10 years.
Managing Director of South Atlantic Petroleum Limited (Sapetro), Mr. Chukwuemeke Anagbogu , expressed delight in the partnership, noting that the signing 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, playing a vital role in sustaining value creation for shareholders, stakeholders, and the nation.
The PSC includes provisions for signature and production bonuses, a defined minimum work programme with performance guarantees, cost recovery and profit-sharing rules, royalties and taxes, gas utilisation to reduce flaring, and obligations for decommissioning, environmental remediation, and host community development; all in line with the PIA.