The Nigerian National Petroleum Corporation (NNPC) has accomplished another feat by signing a Production Sharing Contract (PSC) agreement with ELF Petroleum Nigerian Limited in Abuja recently.

The block in oil prospecting license (OPL) 223 has been described by the Minister of State for Petroleum Resources, Dr. Edmund Daukoru as the most lucrative oil block given out so far. He said it is the most prospective deepwater block in Nigeria.

The Minister said a production bonus of 10 million dollars will be paid by the operator 30 days after commencement of oil production while the contract is for 30 years with an initial ten year operation.

Speaking on the 2005 bidding round progress, Daukoru said a parley would be convened with oil block bidders by the first week of this month to discuss important issues.

In his speech, the Managing Director of Total Oil, Mr. Jocques Marraud Des Grothes who signed on behalf of ELF said, the company is hopeful that the agreement would produce fruitful partnership between ELF and NNPC.

He also announced that the company has put forward a proposal for approval to drill oil wells in the shallow sites and are working to establish two independent power plants in the Niger Delta.

The Group Managing Director of NNPC, Engineer Funsho Kupolokun, who was also present at the ceremony said NNPC hopes to use the opportunity to optimize and improve the technical experience of Nigerian Petroleum Development Company (NPDC), the oil exploration and production subsidiary of NNPC.

ELF has made significant commercial discoveries in Ukot and Usman fields OP 223 which lies in water depth of between 200 and 1,000 metres and lies just east of another deep off shore blosk OPL 22.

The ceremony also witnessed the formalization of a Joint Operating Agreement (JOA) between ELF and NPDC. Under this agreement, ELF will have 70 per cent share of the proceeds while corporation would retain 30 per cent.

Present at the ceremony were the Special Assistant to the President on Petroleum Matters, Alhaji Jafaru Paki and other oil industry executives.