It is an important production sharing agreement that Nigeria has just signed with the multinational oil companies operating in the country. An agreement that paves the way for investments that can reach 10 billion dollars.
It is the culmination of two years of arm wrestling between NNPC – the Nigerian company that manages hydrocarbons – and the leading foreign oil companies such as Shell, Exxon Mobil, Total and Eni.
The agreement signed last Tuesday covers Bonga offshore fields (OML 118). This is the renewal of a production sharing agreement for 20 years. A “crucial moment”, according to the Nigerian president, Muhammadu Buhari himself.
The new agreement was to introduce a flat tax of 10% on offshore fields and 7.5% on land fields, compared to 5% previously. The increase in this flat-rate tax should therefore increase National Company revenues. In any case, the NNPC is hoping.
But Nigeria attracts only a small fraction of oil and gas investment in Africa, despite being the largest producer of black gold on the continent and still having plenty of reserves to exploit. The massive corruption that plagues the sector in Nigeria is sometimes the source of lawsuits against local personalities, but also at the major oil companies, in foreign courts.
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