Canadian Firm Secures Financing For Offshore Nigeria Lease

Shoreline Canadian Overseas Petroleum Development Corp. (ShoreCan) has negotiated finance of between $30 million and $50 million for investment in its 80percent owned affiliate Essar Exploration and Production (Nigeria).

The Mauritius Commercial Bank and Trafigura PTE are the parties involved in the funding arrangement. ShoreCan is 50percent owned by Canadian Overseas Petroleum Ltd.

The facility will help pay for all production-related expenditures following drilling and testing of the initial production well to be drilled by Essar Nigeria on the OPL226 lease, in shallow to mid-water offshore Nigeria.

However, drawing on the facility is contingent on amongst others; ShoreCan itself providing an additional $20-33 million of funding and attracting a further $100 million funding from an offshore oil services group to deliver the project

It is also expected to deliver a minimum average production rate of 6,000 b/d over 20 days as well as securing a formal definitive binding agreement between the parties.

The project as planned will entail drilling and completion of a horizontal oil production well offsetting the 2001 NOA#1 oil discovery well and of two or three further high angle oil production wells in the adjacent NOA East fault block from a common wellhead platform; and placing these wells online during an approved early production scheme.

Essar has prepared a work program for this initial campaign in the form of a field development plan for submission to the concessionaire, the Nigerian National Petroleum Corporation (NNPC).

ShoreCan is in late stage discussions with the identified service provider, covering the provision of drilling services, the supply of a mobile production unit and a storage vessel for a deferred fee.

Source: Offshore

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