Two sets of alternative financing agreements on Joint
Venture (JV) projects to boost reserves and production in line with
government’s aspiration were executed in London 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 within the assets’ life cycle including a flurry
of exploratory activities that would generate employment opportunities in the
industry, boost gas supply to power and rejuvenate Nigeria’s industrial
capacity utilisation.
The agreement with Chevron would see the development of the
NNPC/CNL JV Sonam Project (Project Falcon), hitherto financed through cash
calls, to incremental proven and probable oil/liquids reserves of 211million
barrels and proven and probable gas reserves of 1.9 trillion cubic feet within
in Oil Mining Licences (OMLs) 90 and 91.
The project is expected to begin to bear fruits in next
three and six months.
The Group Managing
Director, NNPC, Dr. Maikanti Baru, said the project is 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) of gas respectively
over the life cycle of the asset.
The JV partner, he said, had already spent $1.5billion
representing 97 per cent of project completion costs, adding that the agreement
would cover the remaining $780million to complete the project.
Giving 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.
He 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.
He said the Sonam Project alone, would increase government’s
earnings to $7.3billion over its life.
The agreement with SPDC, on the other hand, would facilitate
the development of the NNPC/SPDC JV Project Santolina which comprise 156
development activities across 12 OMLs (OMLs 11, 17, 23, 25, 27, 28, 32, 35, 43,
45, 46 and 79) and 30 different fields in the Niger Delta.
The GMD said the development of the Sonam Project would be
done in two phases, with the first phase focusing on short term activities
involving Oil and Gas Generation (STOGG) programme comprising 128 rigless
activities and 10 workovers. The second phase would focus on medium term
activities that would involve further development of EA/EJA fields by drilling
14 new well and three workover ones.
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