The Nigerian National Petroleum Corporation has secured a $1.2 billion multi-year drilling financing package for 36 oil wells under the NNPC and Chevron Nigeria Limited Joint Venture.
This is contained in a statement by the NNPC Group General Manager, Group Public Affairs Division, Ohi Alegbe, in Abuja on Sunday.
Mr. Alegbe said the NNPC and Chevron JV deal was executed at a signing ceremony in London.
He stated that the $1.2 billion would be channelled into the development of 23 onshore and 13 offshore oil wells on OML 49, 90 and 95 in two stages over 2015 to 2018.
Mr. Alegbe stated that the fund was designed to supplement the Federal Government’s cash call commitment in the oil and gas sector.
He stated that the funding package, which was being financed by a consortium of Nigerian and International lenders, was an integral part of the accelerated upstream financing programme initiated by NNPC.
He said that the programme was designed to address the perennial challenge experienced by the Federal Government in providing its counter-part funding of JV upstream activities.
He explained that the initiative would also help in the maintaining the current production levels in the short term as well as replace depleting reserves.
He stressed that the stage one of the project made up of 19 oil wells was projected to deliver 21,000 barrels of crude oil and condensate per day.
Mr. Alegbe also stated that the first stage would also lead to the production of 120,000 million standard cubic feet of gas per day (mmscf/d) over 2015 and 2016.
“Stage two of the project which comprised of 17 wells is projected to yield 20, 000 barrels of crude oil and gas production of seven mmscf/d between 2016 and 2018,” he stated.
Mr. Alegbe said both stages of the project were envisaged to generate up to two to five billion of incremental revenue to the Federation Account.
Beyond the contribution to the national treasury, the projected peak incremental gas production of 127mmscf/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,’’ he stated.
Mr. Alegbe explained that Group Managing Director of the NNPC, Ibe Kachikwu, said the alternative funding arrangement was the new contractual model in upstream financing.
Mr. Kachikwu said the new model would serve as a template for future initiative to supplement the Federal Government’s Joint Venture Cash Call commitment.
He commended the Joint Finance Team and the consortium of local and international lenders led by Standard Chartered Bank and United Bank for Africa for a job well done.
“NNPC would not relent in the renewed effort to restore probity and transparency to the process of generation, collection and remittance of crude oil proceeds.
“I have always believed that issues of Federation Accounts must be left sacrosanct and not to be toyed with.
“The Accelerated Upstream Financing Programme is designed to help us achieve this objective,’’ he said.
Mr. Alegbe also said that Managing Director, Chevron Nigeria Limited, Clay Neff, pledged the readiness of Chevron to work assiduously with the NNPC to meet its set target in the project.