The Nigeria National Petroleum Corporation (NNPC) has secured a $1.2 billion (N238.6bn) multi-year drilling financing package for 36 offshore/onshore oil wells under the NNPC/Chevron Nigeria Limited Joint Venture.
The funding package, financed by a consortium of Nigerian and International lenders, is an integral part of the Accelerated Upstream Financing Programme initiated by NNPC to address the perennial challenge experienced by the Federal Government in providing its counter-part funding of JV upstream activities.
A statement from the NNPC said the initiative apart from supplementing the Cash-Call commitment would help in the maintenance of current production levels in the short term as well as replacing depleting reserves. A breakdown of the NNPC/ Chevron JV deal which was executed at a signing-ceremony in London over the weekend indicate that the $1.2bn is to be channeled into the development of 23 onshore and 13 offshore wells on OML 49, 90 and 95 in two stages over 2015- 2018.
Stage one comprising 19 wells is projected to deliver 21, 000 barrels of crude oil and condensate per day alongside 120 million standard cubic feet of gas per day, mmscf/d, over 2015 and 2016. Stage two, comprising 17 wells is projected to yield 20, 000 barrels of crude oil and condensate per day alongside gas production of 7 mmscf/d between 2016 and 2018.
It is envisaged that both stages of the project would generate $2 to $5 billion of incremental revenue to the Federation Account. Beyond the contribution to the national treasury, the projected peak incremental gas production of 127 mmscf/d, which is the electricity equivalent of 400 megawatts would help boost the Federal Government’s domestic gas aspirations with expectant positive effect on power supply.
Speaking at the ceremony, Group Managing Director of the NNPC, Dr. Ibe Kachikwu, described the new alternative funding arrangement as the new contractual model in upstream financing which would serve as a template for future initiative to supplement the Federal Government’s Joint Venture Cash Call commitment. While commending the NNPC/ Chevron Joint Finance Team and the Consortium of local and international lenders led by Standard Chartered Bank and UBA for a job well done, the GMD noted that the corporation will not relent in the renewed effort to restore probity and transparency to the process of generation, collection and remittance of crude oil proceeds.
Clay Neff, Managing Director of Chevron Nigeria Limited pledged the readiness of Chevron to work assiduously with the NNPC to meet its set target in the project.
