Nigerian National Petroleum Corporation (NNPC) has signed a novation agreement with Nigerian Agip Oil Company (NAOC) on Oil Mining lease (OML) 60,61,62 and 63.
Nigerian Agip Oil Company (NAOC) Limited operates in the Niger Delta, under a joint venture arrangement with NNPC (60 per cent), NAOC (20 per cent), and Oando (20 per cent),
The Group Managing Director of the NNPC Malam Mele Kyari said at the signing agreement in Abuja, on Wednesday that the agreement will strengthen relationship with its partners.
A novation agreement transfers the contractual obligations of one party to a third party or replaces a contractual obligation with another one. All parties involved in this type of contract must consent to the changes.
He said that by the agreement the NNPC had transferred its stake to its subsidiary, the Nigeria Petroleum Development Company, its subsidiary to operate with its partners.
“The federation divested its interests in the NAOC/NNPC joint venture and that means we transfer those interests to Nigerian Petroleum Development Company (NPDC).
“The meaning of that is to grow NPDC to become a medium size upstream company that the federation and the NNPC will be proud of,’’ he said.
He added that Part of the requirement for the agreement was to have the divestment authorized by the Minister of Petroleum Resources adding that a novation agreement was needed to do so.
He said that the corporation had issues of lack of assurance that it could not deliver on its responsibilities to its partners.
He noted that the signing of agreement was a clear sign to convince the partners that NPDC would deliver to its responsibility.
He assured that the corporation would continue to support efforts that would help to grow the sector.
“Today, we have given them all the comfort and condition precedent for them to be convinced that NPDC will deliver.
“That is why our partners, NAOC and OANDO have agreed to sign novation agreement which will open a new chapter of business for NPDC and our partners,’’ he added.
This, he noted would expand the frontier of reserves and production for our country and the companies.
Report has it that Kyari signed for the NNPC, Fiorillo Lorenzo Manging Director of NAOC signed for NAOC while Mofe Boyo Deputy Group Chief Executive, Oando signed for OANDO
Responding, the managing Director of NAOC, Mr Fiorillo Lorenzo said that the agreement was a welcome development and assured that his company would keep to the terms.
“For us, it is a very important roadmap being together to find a solution and a common ground to operate.
“This is for NAE and Agip, good development and we will continue to support the ambition and strategy”, he said.