Olufola Wusu

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#GuardianNews has reported that…

The Society of Petroleum Engineers,Nigeria (SPE) has frowned at the non-existence of Production Sharing gas Contracts (PSCs) in the country’s oil and gas sector…

 

Though, Nigeria has an existing Production Sharing Contracts (PSC), which is strictly for oil production, the absence of gas contract, according to the SPE Nigeria Council Chairman, Chikezie Nwosu, is inhibiting gas development in the country.

#Insight
In a PSC, the NNPC engages a competent contractor usually an International Oil Company (IOC) to carry out petroleum operations on NNPC’s wholly held acreage. The contractor undertakes the initial exploration risks and recovers his costs if and when oil is discovered in commercial quantities and extracted.
Considering the fact that the royalty rates regulate deep water drilling, it was not particularly prudent on Nigeria’s part to have based the royalty rates on drilling depth, ignoring indices like production levels, oil prices etc. Even more alarming is the fact that deep offshore reserves are more prolific than land based reserves.

To read more about, Reviewing Production Sharing Contracts for Gas Companies, to be used in deep offshore fields, please follow this link:

REVIEWING PRODUCTION SHARING CONTRACT FOR GAS COMPANIES BY OLUFOLA WUSU

 

 

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*As published by Thisday Lawyer

*As published by Thisday Lawyer