The Nigerian National Petroleum Corporation has signed a deal worth $3.15 billion Financing and Technical Services Agreement between Sterling Oil Exploration and Energy Production Company Limited (SEEPCO) and the exploration and production arm of NNPC, the Nigerian Petroleum Development Company (NPDC), for the development of Oil Mining Lease (OML) 13.
The deal would help to boost the nation’s crude oil reserves and daily oil production to 3 million barrels per day.
Group General Manager, Group Public Affairs Division, Mr. Ndu Ughamadu, quoted the Group Managing Director of NNPC, Mallam Mele Kyari, in a statement describing the funding arrangement as a game changer to oil and gas project financing in Nigeria.
He stated that the Federal Government is expected to earn over $10.2 billion in royalties and taxes from the project over the next 15 years, while NNPC would earn over $5 billion after payment of the entire financing obligation.
He advised the management of NPDC to develop a strong community engagement strategy to forestall any crisis that could hinder operations.
The GMD disclosed that the acreage had over 926 million stock tank barrels (mmstb) and 5.24 trillion cubic feet (tcf) respectively of oil and gas reserves, adding that the Financing and Technical Services Agreement was for a period of 15 years while the $3.15 billion ceiling funding would be provided by SEEPCO with a 10-year capital investment period and five years for cost recovery.
First oil of about 7,900bpd is expected from the project by 1st April, 2020, while production is expected to peak at 94,000bpd and 542mmscfd within four years.
On local content, the project is expected to enhance participation by indigenous companies in the industry by providing over 2,000 direct and indirect job opportunities.
Also speaking at the occasion, Chairman of Sterling Oil Exploration and Energy Production Company Limited, Mr. Tony Chukwueke, expressed delight at the opportunity offered the company to support the production and reserves growth aspiration of the Federal Government.
OML 13 is 100 per cent owned by the NPDC and is located in the eastern axis of the Niger Delta covering a total area of 1987km².