Oil Majors Make Peace with Nigerian Government After Reaching New Production Deals
- August 25, 2022
- Posted by: Quatro Strategies
- Category: Energy
Four oil majors, Shell, Chevron, ExxonMobil and Equinor, have agreed to terminate U.S. lawsuits that sought a multi-billion dollar arbitration against Nigeria’s state-owned oil company, after reaching new deepwater oil production sharing agreements. Two federal judges granted requests by the four oil companies to end their lawsuits so that the agreement could take effect, which is expected by late October.
The companies said they expect to terminate the litigation thereafter.
Nigerian National Petroleum Corporation (NNPC) renewed its agreements with the four companies and France’s TotalEnergies on Aug. 12.
Those agreements included five deepwater blocks that could produce as many as 10 billion barrels over 20 years.
Exxon and Shell had been looking to enforce a $1.8 billion arbitration against NNPC from 2011, while Chevron and Equinor sought to enforce a $995 million award from 2015.
The companies had accused NNPC of drawing more oil than permitted under contracts, that dated from 1993. The contracts were made to encourage oil companies to invest billions of dollars for exploration and development.
The awards have since grown in size, and together were recently worth closer to $4 billion.
On July 8, a U.S. appeals court said Exxon and Shell were entitled to enforce part of their award against NNPC.
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