NNPC eyes 3 million barrels per day oil production with $3.15 billion financing for OML 13

The Nigerian National Petroleum Corporation (NNPC) has signed a $3.15 billion financing and technical services agreement with Sterling Oil Exploration and Energy Production Company Limited (SEEPCO) and the exploration and production arm of NNPC for the development of Oil Mining Lease (OML) 13.

L-R: CEO of SEEPCO, Mr. Deepak Babubhai; Chairman of SEEPCO, Mr. Tony Chukwueke; rep. of NNPC GMD & NNPC COO, Upstream, Mr. Roland Ewubare; & Managing Director of NPDC, Mr. Mansur Sambo, signing Financing & Technical Services Agreement at the NNPC HQ

OML 13, one of the lucrative oil wells, located in the eastern axis of the Niger Delta, covering a total area of 1987km² is 100 percent owned by the Nigerian Petroleum Development Company (NPDC).

The quest is to increase the nation’s crude oil reserves and daily oil production to 3 million barrels per day, the oil firm said in a statement issued by its General Manager, Group Public Affairs Division, Ndu Ughamadu, quoting the Group Managing Director of NNPC, Mallam Mele Kyari.

Nigeria estimated to produce 2.32 million barrels per day in the 2019 budget.

Kyari described the funding arrangement as “a game-changer to oil and gas project financing in Nigeria”.

The GMD, who was represented by the Chief Operating Officer, Upstream, Roland Ewubare, expressed gratitude to President Muhammadu Buhari, GCFR, for approving the transaction, adding that OML 13 held strong potentials both for the petroleum industry and the nation’s economy.

He disclosed that the Federal Government is expected to earn over $10.2bn in royalties and taxes from the project over the next 15 years, while NNPC would earn over $5bn 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 boasts of 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 $3.15bn 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 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, Tony Chukwueke, expressed delight at the opportunity offered the company to support the production and reserves growth aspiration of the Federal Government.

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