Oil Contract Acceleration: NNPCL IOC's Sign MoU

On Monday, September 25, the Nigerian National Petroleum Company Limited (NNPC) and the Nigerian Content Development and Monitoring Board (NCDMB) signed a Memorandum of Understanding (MoU) with the international oil companies (IOCs) to lower the contracting cycle by 81.6%.

This means they will cut the current cycle to the highest level of not more than 180 working days out of the current 327 days—the deal was signed in Abuja at the NNPC Towers

The NNPC stated that this move was in line with its commitment to the goals of the Petroleum Industry Act (PIA) to foster an industry framework for an optimised contracting cycle.

The NNPC also said that the deal was signed to improve business, reduce costs, and boost efficiency, which will assist in increased revenues, production growth, and improved profitability.

The statement partly reads,

• The MoU is also expected to contribute significantly to the double-digit economic growth rate agenda of the Federal Government and generate tremendous value for all the stakeholders, which include investors, companies, host communities, and the nation at large.

• Key benefits of the framework in the MoU include a reduction of the contracting cycle for open competitive tender, selective tender, and single sourcing tender to 180, 178, and 128 working days respectively compared with the current best-effort performance of 327, 333, and 185 working days respectively.

The Press Release on X

Commenting on the signing of the MoU, Mr. Mele Kyari, the NNPC Group Chief Executive Officer, stated that the event honoured exciting times for Nigeria's oil and gas industry and stands as an achievement that the company is pushing towards a positive path.

Kyari was represented by Mrs. Oritsemeyiwa Eyesan, the NNPC Executive Vice President, Upstream. She added that with the oil and gas industry growing in Nigeria, there is a need to expedite the contracting process in the industry to revitalise the nation's economy.

In the meeting, it was gathered that the newly signed deal will help ramp up Nigeria’s waning crude oil production, which will ensure compliance with the Nigerian Content Act and timely approval of documents.

Top officials who signed the agreement included the Managing Director of Shell Petroleum Development Company (SPDC) and Country Chair, of Shell Companies in Nigeria (SCiN), Mr. Osagie Okunbor, and the Chairman and Managing Director of ExxonMobil’s affiliates in Nigeria, Mr. Shane Harris.

Others included the Director of Joint Ventures for Chevron Nigeria, Mr. Iwueze Cosmas; the Managing Director of Nigerian Agip Oil Company Ltd. Mr. Fabrizio Bolondi, and the Executive Director of Joint Ventures, Total Exploration and Production Nigeria, Mr. Obi Imemba.

In different remarks, the IOCs, represented by the MDs/Country Chairs of Shell, ExxonMobil, Chevron, TotalEnergies, and ENI, all vowed their commitment and backing towards the implementation of the MoU for the benefit of all parties.