As part of a strategic move to grow Nigeria’s oil and gas reserves and generate more income, the Nigerian National Petroleum Corporation, NNPC has secured a $1.2 billion (N294 billion) multi year drilling financing package for 36 Offshore/Onshore Oil wells under the NNPC/Chevron Nigeria Limited Joint Venture.
At the ceremony held in London to consummate the deal, the Group Managing Director of the NNPC, Dr Ibe Kachukwu described the new alternative funding model in the upstream financing which would serve as a template for future initiative to supplement the Federal Government’s Joint Venture Cash Call commitment.
A breakdown of the funds which is being financed by a consortium of Nigerian and International lenders indicates 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 million standard cubic feet per day (mmscf/d) between 2016 and 2018.
It is also 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.