The Nigerian National Petroleum Corporation (NNPC) says it has signed a 3.15 billion dollars Financing and Technical Services Agreement between Sterling Oil Exploration and other partners for the development of Oil Mining Lease (OML) 13.
The corporation disclosed this in a statement signed by Mr Ndu
Ughamadu, its Group General Manager, Group Public Affairs Division, on
Tuesday in Abuja.
He said the other partners are Energy Production Company Limited
(SEEPCO) and the exploration and production arm of NNPC, the Nigerian
Petroleum Development Company (NPDC).
He said that the move was part of the quest by the NNPC to increase the
nation’s crude oil reserves and daily oil production to three million
barrels per day.
OML 13 is 100 per cent owned by the NPDC and is located in the Eastern axis of the Niger Delta covering a total area of 1987km².
He said that the Group Managing Director (GMD) of NNPC, Malam Mele
Kyari, had described the funding arrangement as “a game changer to oil
and gas project financing in Nigeria”.
He expressed gratitude to President Muhammadu Buhari, for approving the
transaction, adding that OML 13 held strong potential both for the
petroleum industry and the nation’s economy.
Explaining the terms of the financing, Kyari disclosed that the Federal
Government is expected to earn over 10.2 billion dollars in royalties
and taxes from the project over the next 15 years.
Also NNPC would earn over five billion dollars after payment of the entire financing obligation.
The GMD advised the management of NPDC to develop a strong community
engagement strategy to forestall any crisis that could hinder
operations.
He disclosed that the acreage boasts of over 926 million stock tank
barrels (mstb) and 5.24 trillion cubic feet (tcf) respectively of oil
and gas reserves, adding that the Financing and Technical Services
Agreement was for a period of 15 years.
According to him, 3.15 billion dollar ceiling funding will be provided
by SEEPCO with a 10-year capital investment period and five years for
cost recovery.
First oil of about 7,900bpd is expected from the project by April, 1,
2020 while production is expected to peak at 94,000bpd and 542mmscfd
within four years.
On local content, the project is expected to enhance participation by
indigenous companies in the industry by providing over 2,000 direct and
indirect job opportunities.
The Chairman, Sterling Oil Exploration and Energy Production Company
Limited, Mr Tony Chukwueke, expressed delight at the opportunity offered
the company to support the production and reserves growth aspiration of
the Federal Government. (NAN)