KEY POINTS
- TY Danjuma’s South Atlantic Petroleum signs $10 million deal.
- First deepwater PSC under the Petroleum Industry Act.
- Bonuses tied to 35m and 100m barrels output.
The Nigerian oil and gas company South Atlantic Petroleum, run by businessman Theophilus Yakubu (TY) Danjuma, has signed a $10 million Production Sharing Contract with the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) and TotalEnergies.
The purchase includes Petroleum Prospecting Licenses 2000 and 2001, which the government awarded in last year’s licensing cycle and which cover 2,000 square kilometers in the Niger Delta Basin. TotalEnergies will run the blocks, but South Atlantic Petroleum will own 20 percent of them.
The deal includes a $10 million signing bonus and production bonuses of two million and four million barrels, or their cash equivalents, when production hits 35 million and 100 million barrels.
Nigeria signs a new agreement for deepwater oil
Gbenga Komolafe, the Chief Executive Officer of NUPRC, said at the signing ceremony in Abuja on Monday that the deal marked “a new chapter” for Nigeria’s upstream business. The deal is based on government changes meant to help the regulator’s cluster and nodal development strategy achieve 810,000 barrels of oil per day from deepwater fields.
Furthermore, Komolafe said that President Bola Tinubu’s executive directives from 2024 on fiscal incentives, local content, and contract schedules helped investors feel safe again. He remarked, “These licenses are a big step forward for our upstream industry.”
Deal includes a $10 million bonus
Bayo Ojulari, CEO of the Nigerian National Petroleum Company Ltd., called the PSC “unique” because the government awarded its first deepwater contract under the Petroleum Industry Act.
The deal covers both crude oil and natural gas. It has features like a 70 percent cost recovery cap and profit gas splits that are meant to make it easier to make money from non-associated gas.
Ojulari also added, “This is the first deepwater PSC to fully integrate strong gas provisions, which are very important for Nigeria’s energy future.”
Private company boosts production
According to Billionaires Africa, South Atlantic Petroleum is one of Nigeria’s biggest privately held exploration and production businesses. TY Danjuma started it. Its portfolio spans more than 74,000 square kilometers in West Africa, with assets ranging from exploration sites to producing fields.
Finally the company has set itself up to increase production and expand its position in Nigeria’s upstream industry alongside foreign companies.
