NNPC secures $1.2bn loan for JV funding

The Nigerian National Petroleum Corporation (NNPC) in order to meet its counter-part funding of joint Venture (JV) upstream activities has secured a $1.2 billion (about N238.6bn) multi-year drilling financing package for 36 Offshore/Onshore Oil wells under the NNPC/Chevron Nigeria Limited Joint Venture.
The funding package is financed by a consortium of Nigerian and International lenders and is an integral part of the Accelerated Upstream Financing Programme initiated by NNPC to address the perennial challenge of the Federal Government in providing its counter-part funding of JV activities.
The corporation on Sunday in a statement, 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.

Read also: FG not ruling out new refineries – NNPC boss

· 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, 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.

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