NNPC ready to implement new production sharing contract framework – Ojulari

The Nigerian National Petroleum Company Limited (NNPC Ltd) has announced it is ready to implement a newly approved Production Sharing Contract (PSC) framework aimed at revitalizing investment in Nigeria's deep offshore oil and gas sector. The framework, introduced via the Deep Offshore Oil and Gas Projects Incentives (Tax Remission) Order, 2026, was signed by President Bola Tinubu on Tuesday, marking a pivotal moment in the country’s energy policy. The move comes as part of broader federal efforts to streamline regulations, attract foreign capital, and boost domestic participation in the industry. The new framework replaces years of ad hoc negotiations with a standardized, transparent system intended to offer greater predictability for both investors and the Nigerian government. According to NNPC Group Chief Executive Officer, Bayo Ojulari, the policy is expected to unlock up to $50 billion in new investment, with the Bonga South West project serving as the first major beneficiary. This project, currently being developed by Shell and its partners, is anticipated to become the first Final Investment Decision (FID) on a Nigerian deepwater PSC asset since 2008. Ojulari emphasized that the new approach would reduce uncertainty, thereby enhancing investor confidence and facilitating quicker project approvals. The reform introduces a rules-based structure that applies to multiple qualifying deep offshore developments, rather than addressing each project individually. This shift is designed to simplify the process for international firms looking to invest in Nigeria’s complex and costly deepwater reserves. The framework includes clear eligibility criteria, streamlined procedures, and financial incentives tailored to encourage long-term capital inflows. It also seeks to ensure that the nation retains long-term value from these projects while fostering local content and economic growth. The government has set an ambitious target of increasing crude oil production to three million barrels per day by 2030. To achieve this, it has prioritized the development of technically challenging offshore assets, including the Bonga South West, Zabazaba, and Owowo projects. These developments are expected to generate significant employment opportunities, expand local supply chains, and contribute to Nigeria’s broader economic recovery. The new framework is positioned to accelerate progress toward this goal by reducing bureaucratic hurdles and offering investors a more reliable operating environment. President Tinubu highlighted the importance of fiscal certainty in attracting sustained investment, noting that nations successful in drawing long-term capital often provide consistent regulatory frameworks. During discussions with Shell CEO Wael Sawan, key elements of the reform were outlined, emphasizing the need for a unified approach to managing deep offshore projects. The administration credits the collaboration between the Ministry of Justice, the Ministry of Finance, the Ministry of Petroleum Resources, the Nigeria Revenue Service, and other agencies for shaping the final policy. The Nigerian Upstream Petroleum Regulatory Commission and the Nigerian Content Development and Monitoring Board were also recognized for their roles in supporting the initiative. The reform underscores Nigeria’s growing focus on positioning itself as a regional leader in deep offshore exploration and production. By aligning with global standards and promoting transparency, the government hopes to attract multinational corporations and local firms alike. Mrs. Olu Verheijen, the President’s Special Adviser on Energy, stressed the importance of strengthening Nigerian industrial capabilities, ensuring that qualified projects maximize local execution where possible. She noted that the reform goes beyond mere investment targets, aiming to create skilled jobs, develop infrastructure, and establish Nigeria as a preferred location for deep offshore operations in Africa. As the government moves forward with implementing the new framework, NNPC Ltd has confirmed its readiness to act as the designated counterparty under the revised PSC model. This role positions the state-owned entity at the forefront of executing the policy, ensuring alignment with both national interests and international best practices. With the Bonga South West project poised to lead the charge, the coming months will likely see a surge in activity across the deep offshore sector, signaling a renewed era of investment and growth in Nigeria’s energy landscape.