……to increase revenue, direct foreign investment, access to affordable energy, and job creation.
On Friday, August 12, 2022, the NNPC Ltd signed the execution of fully termed agreements for the renegotiated PSCs, less than a month after President Buhari unveiled the company.
According to the NNPC Limited, this is a major landmark achievement since its transition to a limited liability company under the Company and Allied Matters Act (CAMA).
Recall that the Petroleum Industry Act (PIA) was signed into law by President Muhammadu Buhari on August 16, 2021. This law gave NNPC the legal backing to renegotiate all of its existing PSCs in conformance to the provisions of the new Act within 1 year.
The PIA in Section 311(2) stipulates that new PSC agreements under new Heads of Terms will be signed between NNPC Ltd as Concessionaire and her Contractor Parties within one year of signing the PIA into law, giving a deadline of August 15, 2022.
This provision paved the way for the resolution of lingering disputes, which created investment uncertainty and stifled new investments in the nation’s deep offshore assets. To achieve this, NNPC Ltd leveraged the near-end term of the PSCs and the parties’ interest in renewing the PSCs as a negotiation currency in bringing the contractors to work towards trading the past for the future.
These renewed PSCs would provide several benefits, such as improved long-term relationships with contractors, the elimination of contractual ambiguities, especially about gas terms, and enabling early contract renewal, amongst others.
The signing of the new PSCs by NNPC Ltd is a significant milestone achievement that will ultimately open up opportunities in the Nigeria Upstream sector.
The execution of the PSCs will deepen investment and development of Nigeria’s rich petroleum resources and ensure that the trifold mandate of the NNPC Ltd. to ensure energy availability, sustainability, and accessibility is achieved.
Ultimately, the new PSCs will provide an inflow of direct foreign investment, expanded access to affordable energy, job creation, and socio-economic development.
