A top official of Chevron Nigeria Limited (CNL), weekend revealed the reason behind the fresh financing agreement with Nigerian National Petroleum Corporation (NNPC) is to drive incremental revenues of about $16bn within the assets’ life cycle and would boost gas supply to power plants.
The Corporation also sealed similar deal with royal Dutch oil giant, Shell in London within the according to the agreement, listed partners stand as the NNPC/Chevron Nigeria Limited JV and NNPC/Shell Petroleum Development Company JV.
Additional details show that the agreement with Chevron would see the development of the NNPC/CNL JV Sonam Project (Project Falcon), hitherto financed through cash calls, to incremental proven and probable oil/liquids reserves of 211 million barrels and proven and probable gas reserves of 1.9 trillion cubic feet within Oil Mining Licences 90 and 91.
NNPC in a statement weekend by Mr. Ndu Ughamadu, said the project was expected to begin to bear fruits in the next three to six months.
The Group Managing Director, NNPC, Dr. Maikanti Baru, who signed for the corporation, said the project was envisaged to achieve an incremental peak production of about 39,000 barrels per day of liquids and 283 million standard cubic feet of gas per day.
The JV partner, he said, had already expended $1.5bn, representing 97 per cent of project completion costs, adding that the agreement would cover the remaining $780m to complete the project’s scope.
In a breakdown, of the expected funding requirements of the Sonam Project, Baru said $400m was to fund the development of seven wells in the Sonam field (OML 91), the Okan 30E non-associated gas well (OML 90), and associated facilities, including completion of the Sonam NAG Well Platform.
Baru noted that $380m would be required to reimburse the JV partners for the 2016 portion of the funds committed to lenders that had been cashed and paid for, stressing that the Sonam Project, on fruition, would net the Federal Government cumulative incremental earnings of $7.3bn over the project’s life.
Business Hilights gathered that the SPDC will facilitate the development of the NNPC/SPDC JV Project Santolina, which comprises of 156 development activities across 12 OMLs and 30 different fields in the Niger Delta.
In his brief comment on the new deal, Chairman and Managing Director of CNL, Mr. Jeffrey Ewing, said Chevron Nigeria Limited was committed to supporting Nigeria’s aspirations of sustaining oil and gas production through innovative strategies as typified by the alternative financing arrangements over which agreement was executed.
