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

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.