NUPRC Signs Oil Exploration Deal With NNPCL, TotalEnergies-Sapetro Consortium
By Sunday Etuka, Abuja
The Nigerian Upstream Petroleum Regulatory Commission (NUPRC), has successfully executed the Production Sharing Contract (PSC) with NNPC Limited and the TotalEnergies–Sapetro Consortium, in alignment with the principles of the Petroleum Industry Act (PIA).
Speaking at the Closing Ceremony for the Execution of the PSC on Monday in Abuja, the Commission Chief Executive (CCE) of the NUPRC, Engr. Gbenga Komolafe, affirmed that Nigeria is open for business, ready for investment, and committed to leadership in the global energy space.
According to him, the execution of the Production Sharing Contract covering Petroleum Prospecting Licences 2000 and 2001, which were awarded to TotalEnergies and its partner South Atlantic Petroleum (Sapetro) in the 2024 Licensing Round, marks a new chapter in the nation’s upstream oil and gas industry.
He said the event is not just about signing documents, but about laying the foundation for new exploration and investment.
“This PSC signals the start of a committedwork programme that will help us unlock the untapped geological potential ofour deepwater, expand our reserves, boost production, and strengthen Nigeria’senergy security.
“It also affirms our broader vision to makeNigeria the premier destination for upstream investment in Africa,” he said.
The CCE congratulated TotalEnergies with over 60 years operations in Nigeria and holding 80% contractor interest, as well as Sapetro with 30 years operations and holding 20% contractor interest, on their success in the Licensing Round.
According to him, “the Licensing Round was based on a fair, transparent and competitive bidding process in line with Section 73 of the PIA. Hence the award of these two offshore blocks, spanning about 2,000 square kilometres in the prolific Niger Delta Basin, is a directproduct of the transparent, competitive, and reform-driven framework introduced under the Petroleum Industry Act 2021 (PIA).”
He also commended NNPCL and contractors (TotalEnergies & Sapetro) for their commitment in exploration and production activities in Nigeria, saying that the successes recorded in Egina,Akpo and other assets held or operated by the entities are highly commendable.
The CCE disclosed that the Commission, working hand-in-hand with stakeholders, especially NNPC Limited as the concessionaire, devoted significant time and expertise to develop a new standardised PSC template.
“This template reflects the spirit and intent of the PIA, ensuring clarity, consistency, and fairness for the entire industry. 8. Importantly, the PSC sets out clear terms and conditions to guidethis partnership.
“These include: a. The payment of a signature bonus as stipulated in the licensing round and production bonuses tied to commercial milestones, ensuring value to the Federation; b. A defined minimumwork programme, with the requirement to provide guarantees to assureperformance;
“c. Clear rules on cost recovery and profitoil sharing between the Federation and Contractors, in line with the fiscal provisions of the PIA and applicable laws; d. The payment of royalties andtaxes, and strict compliance with the host community development obligations under the PIA;
“e. Provisions for the treatment of associated and non-associated gas, to ensure optimal utilisation, reduced flaring, and alignment with Nigeria’s gas commercialisation agenda; and f. Obligationsrelating to Decommissioning and Abandonment and Environmental Remediation Fund,to ensure environmental protection, transparency and accountability.”
According to him, these terms provide certainty for investors, fairness for the Federation, and clarity for all parties. Expressing confidence that TotalEnergies and partners would fulfil these terms within allowed windows for mutual benefits to Nigeria federation andTotal as a corporate entity.
Paying glowing tributes to President Bola Tinubu,he thanked him for the bold initiatives and reforms in the industry as well ashis stance that undeveloped assets must return to the basket for rebidding and awarding to competent bidders in line with provisions of the PIA.
He also noted that the 2024 Executive Orders: 40on fiscal incentives, 41 on local content, and 42 on cost efficiency andcontract timelines, have catalyzed massive investment inflows for sharedprosperity.
“The Awardees of 2000 and 2001 Licenseesclearly have become beneficiaries of the laudable initiatives and reforms ofMr. President.
“We therefore urge TotalEnergies and other potential investors to take advantage of the right regulatory, fiscal and governance regime as enthroned by the industry Regulator, NUPRC with fullsupport of a determined and courageous President of the Federal Republic ofNigeria by participating in the next Licensing Round,” he stated.
Speaking on the challenges, he said: “Attracting investors to the 2024 Licensing Round was not easy. But with the approval of Mr. President, the Commission adopted a pragmatic solution introducing minimum signature bonuses as consideration for asset awards.
“This approach aligned Nigeria with international best practice, where countries like Thailand, Israel, Guyana, andBrazil have moved away from heavy, front-loaded bonuses towards minimal or nosignature bonuses to attract investment.”
He commended the technical and legal teams ofNUPRC, NNPC Limited, and the TotalEnergies–Sapetro Consortium for their professionalism and diligence throughout the negotiation process. ToTotalEnergies and Sapetro, I say this: you are not just investing in Nigeriaand our people, but you are also investing in global energy security and enhancing your bottom line.
While stating that the Commission is counting on their operational excellence, innovation,and environmental stewardship as they implement the agreed work programme, Engr.Said the Commission also expects swift and technically sound exploration, leading to early Final Investment Decisions.
He further urged them to deepen local content,create quality jobs, empower Nigerian businesses, develop & produce the asset in line with decarbonisation principles and uphold the highest standards of sustainability, in line with the PIA’s host community provisions.
He said as a regulator, NUPRC remains steadfast in its 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,” he assured.
