Shell wants stakeholders to sustain agreement on new cash call arrangement

Shell  Petroleum Development  Company  has advised that the  parties involved in the new cash call arrangement should keep  to  the agreement as failing  to do so  may spell  disaster not only  for the   industry,   but also for  the economy.

Osagie Osunbor,  country  chair and managing directors of  SPDC  asked  the  parties  in the  new  joint  venture agreement to keep faith with the letters of the agreement as  that  could lead to more investment from  the  international oil  companies.

According to him, there would be a lot of confidence by the international oil companies, stating that the $15 billion the company wants to invest is underpinned by confidence the company has in the country

The Shell  boss  who spoke  on the  sideline of a  meeting in  Lagos  said  that the  Nigerian National Petroleum Corporation (NNPC)  has  largely kept  faith with the agreement so far would soon begin to flow into the oil and gas industry.

 The federal Government initially paid $400million out of the 1.5 billion owed the international oil companies. This was however different from  the discounted $6.8 billion cash call arrears which cover over five years to international oil companies but which the government was able to trim  down  to $5.1 billion.  This $5.1 billion is to be paid off over a five year period through  incremental  production, not  from existing production.

 The companies involved are ExxonMobil, Chevron, Shell, Total and  Nigeria Agip.

The minister of State  for Petroleum  Resources, Ibe  kachilwu had said that the country’s oil  production  could  increase by 700,000 barrels per day this  year.

Meanwhile Shell says  it is  committed to further unlocking Nigeria’s deep-water resources and along with its co-venture and government partners is evaluating opportunities to further increase production of the Bonga field in an efficient and cost-effective way.

One such opportunity is the Bonga South West/ Aparo (BSWA) Project. In June 2017 SNEPCo, a subsidiary of Shell organised multi-stakeholder local content workshops on the potential opportunities the project may bring to Nigerian service providers. This was in fulfilment of mandatory requirements by the Nigeria Content Development and Monitoring Board. A decision on progressing the BSWA project is currently being awaited.

SNEPCo is also a co-venture partner in the Erha field, which is operated by the ExxonMobil subsidiary Esso Exploration and Production Nigeria (Deepwater) Limited. Located 140 km offshore in the Gulf of Guinea at water depths of between 1,200 and 1,800 metres, production commenced in 2006. The Erha FPSO has a production capacity of 210,000 barrels of oil per day. In recent years, the field has expanded production with both the North Phase 2 and 3 projects coming on stream ahead of schedule in 2015 and 2017 respectively.

Olusola  Bello