In a landmark move designed to supplement the Federal Government’s Cash-
Call commitment, the Nigerian National Petroleum Corporation, NNPC has
secured a $1.2 bn multi-year drilling financing package for 36
Offshore/Onshore Oil wells under the NNPC/Chevron Nigeria Limited Joint
Venture.
The funding package which is being 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.
It also envisaged that 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.
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, 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.
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, Dr. Ibe Kachikwu, Group Managing Director of the
NNPC, 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.
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.
With the completion of its financing, Project Cheetah stands as the
pioneer project under the Accelerated Upstream Financing Programme of the
NNPC. 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.