NEWS

NNPC, Chevron In $1.7bn Deal To Increase Crude Production

Nigeria’s state oil firm, the Nigerian National Petroleum Corporation (NNPC) and Chevron Nigeria Limited (CNL) have concluded an Alternative Financing Agreement that would see increase in crude oil production in the country by about 39,000 barrels per day (bpd) and achieve an incremental peak production of about 283mmscfd of gas.

Group Managing Director of the NNPC, Dr. Maikanti Baru, signed the agreement on behalf of the Corporation, while the Managing Director of CNL, Mr. Jeff Ewing signed on behalf of his company.

Dr Baru said the project will cost about $1.7bn, with $780mn expected to be funded by third-party. It will produce natural gas liquids and condensate extracted from the Sonam and Okan fields located in OML 90 and 91 in Nigeria’s Niger Delta region.

The project would also include the completion of the Sonam non-associated gas (“NAG”) well platform and Sonam living quarters platform; drilling of seven wells in the Sonam field and the Okan 30E NAG well; as well as the completion of the 20“ x 32Km Sonam pipeline and Okan pig receiver platform and development of the associated facilities, e360 learnt.

Remarking, the Managing Director of CNL, Mr. Jeff Ewing said his company supported the Nigerian government’s aspirations to sustain oil and gas production because of the important role gas supply to the domestic market plays in growing power generation.

In carrying out the project, the NNPC/CNL JV adopted a 2-staged financing approach. Stage 1 which provided $400mn sourced from Nigerian Commercial Banks and Stage 2, to provide $380mn from International Commercial Banks.

Out of the US$780mn total financing for both stages, Chevron’s Co-lending totals US$312mn while NNPC’s portion of the total facility stand is US$468mn.

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