FG to re­alise $16bn from NNPC, IOCs new JV deal

Daily Trust - - BUSINESS - By Daniel Adugbo

Two sets of al­ter­na­tive fi­nanc­ing agree­ments on Joint Ven­ture (JV) projects to boost Nige­ria’s re­serves and pro­duc­tion were ex­e­cuted in Lon­don on Mon­day be­tween the Nige­rian Na­tional Petroleum Cor­po­ra­tion (NNPC) and two of its JV part­ners: NNPC/Chevron Nige­ria Lim­ited (CNL) JV and NNPC/Shell Petroleum De­vel­op­ment Com­pany (SPDC) JV.

The two projects are ex­pected to gen­er­ate in­cre­men­tal rev­enues of about $16bil­lion, gen­er­ate em­ploy­ment op­por­tu­ni­ties, boost gas sup­ply to power and re­ju­ve­nate Nige­ria’s in­dus­trial ca­pac­ity uti­liza­tion.

The agree­ment with Chevron would see the de­vel­op­ment of the NNPC/ CNL JV Sonam Project (Project Fal­con). The project is ex­pected to be­gin to bear fruits in next three and six months.

A state­ment from the NNPC quoted its Group Man­ag­ing Di­rec­tor Dr Maikanti Baru, to have said that the project was en­vis­aged to achieve an in­cre­men­tal peak pro­duc­tion of about 39, 000 bar­rels per day of liq­uids and 283mil­lion stan­dard cu­bic feet of gas per day (mm­scf/d).

The JV part­ner, he said, had al­ready ex­pended $1.5bil­lion rep­re­sent­ing 97 per cent of project com­ple­tion costs, adding that the agree­ment would cover the re­main­ing $780mil­lion to com­plete the project’s scope.

Pro­vid­ing a break­down of the ex­pected fund­ing re­quire­ments of the Sonam Project, Dr Baru said $400mil­lion is to fund the de­vel­op­ment of seven wells in the Sonam field (OML 91), the Okan 30E Non-As­so­ci­ated Gas (NAG) well (OML 90), and as­so­ci­ated fa­cil­i­ties in­clud­ing com­ple­tion of Sonam NAG Well Plat­form.

The GMD added that $380mil­lion would also be required to re­im­burse the JV part­ners for the 2016 por­tion of the funds com­mit­ted to lenders that had been cashed and paid for.

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