CHEVRON GETS $1.2BN LOAN TO DEVELOP 36 OIL WELLS IN NIGERIA

Tectono Business Review has confirmed that Chevron Nigeria Limited (CNL), operator of the Nigerian National Petroleum Corporation/CNL Joint Venture (the NNPC/CNL JV) has signed an agreement to take $1.2 billion loan for the development of 36 oil wells in the country.

Chevron Nigeria Limited made this development known through a statement that on September 17, 2015, it signed a loan agreement, in conjunction with NNPC, for the sum of up to $1.2 billion to fund a 36-well development program for the NNPC/ CNL JV.

The statement stated: “CNL commends the NNPC for recognizing the strategic imperative to supplement funding of the joint venture operations to enable high impact projects that can deliver near term production and bankable cash flow for the joint venture. We support the Nigerian government’s objectives, and are please to do what we can to help the administration succeed in its efforts to build a prosperous Nigeria.”

Last week, the NNPC confirmed that it secured a $1.2 bn multi-year drilling package for the development of 36 offshore/onshore oil wells under the NNPC/Chevron Nigeria Limited Joint Venture.

This is to support the conventional Federal Government’s cashcall commitment to funding projects in the oil and gas industry. The option, it was learnt would go a long way to boost exploration and production which have grossly reduced because of the current lull in the oil market.

The package which is being financed by a consortium of Nigerian and International banks is 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 counter-part funding of JV upstream activities.

Apart from supplementing the Cash-Call commitment, it is also the thinking of the Corporation that the option would help in the maintenance of current production levels in the short term as well as replacing depleting reserves.

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

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

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. It is envisaged that both stages of the project would generate $2 to $5 billion of incremental revenue to the Federation account.

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.