Oil firms in offshore pact with Nigeria

Three oil companies have signed a production-sharing contract with Nigerian National Petroleum Corp. to develop a deepwater field. The three firms are Chevron Nigeria Deepwater Ltd, a subsidiary of Chevron Nigeria (CVX); Shell Nigeria Exploration Production Co., a subsidiary of Shell Petroleum Development Co. of Nigeria (RD); and Brasoil Services Co., a subsidiary of Petrobras Nigeria (PBR). The production agreement was for oil-mining lease 250, one of the 22 oil blocks offered by the government last year. Chevron was appointed as operator of the field, with the other two as partners. Lukman said that the equity under the agreement entitled Chevron to a 50% holding, SNEPCO to 35% and Brasoil to 15%. He added that the production-sharing ratio was 70% for the contractors and 30% for the Nigerian National Petroleum Corp. Under the contract, the multinational oil companies fund the cost of exploration, recoup their investments in crude oil form and share the balance of oil at an agreed-upon ratio with the government. Lukman said the contract was for 30 years – with 10 years devoted to an oil-prospecting lease and 20 years for an oil-mining lease.

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