Nigeria's state-owned oil company NNPC Ltd said on Thursday it had renewed a production sharing contract with Total, China National Offshore Oil Corp and others, a major step to resolving disputes on a deepwater oil block in the Niger Delta.

Oil Mining Lease 130 is located offshore Niger Delta at water depths of over 1000 meters. The block contains the producing Akpo and Egina fields and the Preowei discovery.

NNPC said in a statement that the agreements will pave the way "to firm up final investment decision on the Preowei amounting to USD$ 2.1 billion."

NNPC said the agreements would convert the oil mining lease into a petroleum mining licence, in line with a new law.

Nigeria has struggled with low oil production due to massive crude theft, pipeline vandalism and underinvestment. Oil majors in the country are leaving onshore operations to concentrate on deepwater projects.

Reuters