NNPC SECURES ALTERNATIVE FUNDING OF $1.2BILLION FOR 36 OIL WELLS.

The Nigerian National Petroleum Corporation (NNPC)
has secured a USD1.2 billion multi-year drilling
financing package for 36 oil wells under the NNPC and
Chevron Nigeria Limited Joint Venture (JV).
This is contained in a statement by Mr Ohi Alegbe,
NNPC Group General Manager, Group Public Affairs
Division, in Abuja on Sunday.
The statement stated that the NNPC and Chevron JV
deal was executed at a signing ceremony in London.
It stated that the 1.2 billion dollars would be
channelled into the development of 23 onshore and 13
offshore oil wells on OML 49, 90 and 95 in two stages
over 2015 to 2018.
It stated that the fund was designed to supplement the
Federal Government’s cash call commitment in the oil
and gas sector.
It stated that the funding package which was being
financed by a consortium of Nigerian and International
lenders was an integral part of the accelerated
upstream financing programme initiated by NNPC.
It stated that the programme was designed to address
the perennial challenge experienced by the Federal
Government in providing its counter-part funding of JV
upstream activities.
The statement explained that the initiative would also
help in the maintaining the current production levels in
the short term as well as replace depleting reserves.
It stressed that the stage one of the project made up of
19 oil wells was projected to deliver 21,000 barrels of
crude oil and condensate per day.
It also stated that the first stage would also lead to the
production of 120,000 million standard cubic feet of gas
per day (mmscf/d) over 2015 and 2016.
“Stage two of the project which comprised of 17 wells
is projected to yield 20, 000 barrels of crude oil and gas
production of seven mmscf/d between 2016 and 2018,”
it stated.
It added that both stages of the project were envisaged
to generate up to two to five billion of incremental
revenue to the Federation Account.
Beyond the contribution to the national treasury, the
projected peak incremental gas production of
127mmscf/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,’’ it stated.
The statement explained that Dr Ibe Kachikwu, Group
Managing Director of the NNPC, said the alternative
funding arrangement was the new contractual model in
upstream financing.
Kachikwu said the new model would serve as a
template for future initiative to supplement the Federal
Government’s Joint Venture Cash Call commitment.
He commended the Joint Finance Team and the
consortium of local and international lenders led by
Standard Chartered Bank and United Bank for Africa for
a job well done.
“ NNPC would 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.
The statement also said that Mr Clay Neff, Managing
Director, Chevron Nigeria Limited pledged the
readiness of Chevron to work assiduously with the
NNPC to meet its set target in the project.