Already, the government has renewed the oil mining leases 67,68 and 70 for the Nigerian National Petroleum Corporation (NNPC) and Mobil Producing Nigeria (MPN) Joint Venture, spanning the next 20 years.

The decision to construct Brass LNG Limited will be taken in the third quarter this year, while that of NLNG Train Seven will be early next year.

The Group Managing Director of NNPC, Austen Oniwon, announced the government’s decision yesterday during a world press conference at the Nigerian Oil and Gas conference, in Abuja.

He said that the government was willing to proceed with Brass and NLNG projects to promote investment in the sector and the country’s global market share of liquefied natural gas.

The long delayed decision on the Train Seven has cost the country dearly in terms of revenue and global market share.

The country used to be acclaimed as having the fastest growing LNG plant in the world, supplying 10 per cent of the world’s LNG demands, from a production profile of 22 million tonnes a year.

It has however now, been overtaken by Qatar (80 million tonnes) and Australia (81 million tonnes). These developments had threatened to reduce Nigeria’s market share to a paltry five per cent.

NLNG’s six trains had brought into government coffers over $9 billion as dividends paid to NNPC and $10 billion paid the upstream for gas purchased over the years. Those trains also brought direct foreign investment into the country.

Train Seven will increase NLNG’s capacity by 8.5 million tonnes and will create 13,000 jobs, bringing in $8 billion in direct foreign exchange to the country.

It will also impact positively on power generation especially as it will help share infrastructure with some power plants in the country.

NLNG has been Nigeria’s most successful energy company and has successfully monetised Nigeria’s gas. Indeed, 65 per cent of gas that would have been flared has been successfully sold through NLNG. Train Seven will further reduce amount of flared gas.

The renewal of the oil leases had been a subject of litigation between the Federal Government and Mobil for some months, following the nullification of the initial ratification for renewal, which would have taken effect on December 1, 2009.

But the Minister of Petroleum Resources, Mrs. Diezani Alison-Madueke, who finally signed the renewal in Abuja yesterday, said both parties have arrived at “a mutually fair agreement”, assuring that the Federal Government was commitment to the growth and development of the oil and gas industry.

She said the lease renewal marked another milestone in the country’s hydrocarbon industry in accordance with the criticality of the Federal Government’s statutory right in holding oil and gas assets in particular with the implication in investment decisions and on major project delivery.

Her words: “I am particularly delighted to welcome you all as we formally renew shallow onshore oil mining leases 67, 68 and 70 for the NNPC, Mobil Producing Nigeria joint venture. I am delighted that after a somewhat lengthy process both parties that is, the government and people of Nigeria and the NNPC/MPN joint venture have arrived at what they consider a mutually fair agreement in which to work together for another 20 years.”

The minister stated that renewal of leases was in accordance with paragraph 10 and 13 of the first schedule of the Petroleum Act of 1969 cap V 10, adding that all other pending renewal leases will be expeditiously handled.

She expressed hope that the milestone lease renewal would encourage other investors in the petroleum industry to renew their commitment to the growth and development of the industry with emphasis on gas based industries.

The Group Managing Director of the NNPC, Austen Oniwon commended the minister for her sterling leadership style that nestled the epochal lease renewal, assuring that the joint venture arrangement with MPN will continue to impact positively on the nation’s economy.

He described the NNPC/MPN OML 67, 68 and 70 as the most prolific field in Nigeria onshore shallow waters, adding that the JV in the past 20 years has managed the field most professionally leading to a daily output of 500,000 barrels of crude.