NNPC Secures $1.2b Funding For 36 JV Oil Wells With Chevron | Independent Newspapers Limited
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NNPC Secures $1.2b Funding For 36 JV Oil Wells With Chevron

Posted: Sep 22, 2015 at 12:11 am   /   by   /   comments (0)

Stories By Phillip Oladunjoye,


The Nigerian National Petroleum Corporation, NNPC, on behalf of Nigeria has secured a $1.2 billion multi-year drilling financing package for 36 Offshore/Onshore Oil wells under the Joint Venture (JV) with America oil company, Chevron.

A statement by the NNPC said that the funding package, which is being financed by a consortium of Nigerian and International lenders, was signed by the Nigerian National Petroleum Corporation, NNPC and the subsidiary of Chevron, Chevron Nigeria Limited.

It noted that the counterpart funding is an integral part of the Accelerated Upstream Financing Programme initiated by the NNPC to address the perennial challenge being experienced by the Federal Government in providing its counter-part funding of JV upstream activities.

It also said that the financing, 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.

According to the statement, the breakdown  of the deal, which was executed at a signing-ceremony in London at 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, which it said, comprises 19 wells is projected to deliver 21, 000 barrels of crude oil and condensate per day alongside 120, 000million 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, envisaging that both stages of the project would generate $2 to $5 billion of incremental revenue to the Federation account.

NNPC also noted that 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.

“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.

Managing Director of Chevron Nigeria Limited, Clay Neff, pledged the readiness of Chevron to work assiduously with the NNPC to meet its set target in the project.

The statement noted that with the completion of its financing, Project Cheetah stands as the pioneer project under the Accelerated Upstream Financing Programme of the NNPC, explaining that the project is operated under the NNPC/CNL JV which is owned on a 60-40 basis in favour of the NNPC.

The NNPC/CNL Joint Venture is reputed as the 3rd largest producer in Nigeria. Project Cheetah is projected to achieve a peak incremental production of 61 million barrels of oil equivalent per day.