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NNPC Secures $1.2bn Funding For JV With Chevron

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SAN FRANCISCO, September 20, (THEWILL) – The Nigerian National Petroleum Corporation (NNPC) Sunday said that it had secured a $1.2bn (N236.4bn) multi-year drilling financing package for 36 offshore/onshore oil wells under the NNPC/Chevron Nigeria Ltd Joint Venture to help supplement the federal government's cash-call commitment.

NNPC's spokesman, Ohi Alegbe said the funding package, financed by a consortium of Nigerian and international lenders, was an integral part of the Accelerated Upstream Financing Programme initiated by NNPC to address the perennial challenge experienced by the federal government in providing its counterpart funding of JV upstream activities.

The statement explained that apart from supplementing the cash-call commitment, the initiative would help in the maintenance of current production levels in the short term and replace depleting reserves.

A breakdown of the NNPC/Chevron JV deal, which was executed at a signing ceremony in London over the weekend, indicates that the $1.2bn is to be channeled into the development of 23 onshore and 13 offshore wells on OML 49, 90 and 95, in two stages over 2015-2018.

The Corporation revealed that the stage one comprising 19 wells is projected to deliver 21, 000 barrels of crude oil and condensate per day alongside 120, 000million standard cubic feet of gas per day (mmscf/d) over 2015 and 2016.

It stated that stage two, comprising 17 wells, is projected to yield 20, 000 barrels of crude oil and condensate per day alongside gas production of 7 mmscf/d between 2016 and 2018.

NNPC envisages that both stages of the project would, at completion, generate $2bn to $5bn incremental revenue to the federation account.

It stated further that beyond the contribution to the national treasury, the projected peak incremental gas production of 127 mmscf/d, which is the electricity equivalent of 400 megawatts, would help boost the federal government's domestic gas aspirations with expectant positive effect on power supply.

NNPC GMD, Dr. Ibe Kachikwu, according to the statement, described the new alternative funding arrangement as the new contractual model in upstream financing, which would serve as a template for future initiative to supplement the federal government's JV cash call commitment.

While commending the NNPC/Chevron Joint Finance Team and the consortium of local and international lenders led by Standard Chartered Bank and UBA for a job well done, the GMD noted that the Corporation will not relent in the renewed effort to restore probity and transparency to the process of generation, collection and remittance of crude oil proceeds.

The statement pointed out that the NNPC/CNL Joint Venture is reputed as the 3rd largest producer in Nigeria. Project Cheetah is projected to achieve a peak incremental production of 61 million barrels of oil equivalent per day.