The Nigeria National Petroleum Corporation (NNPC) has received a boost to increase daily oil production to three million barrels per day as it signed a $3.15 billion Financing and Technical Services Agreement (FTSA).
NNPC signed the deal with 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.
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.
The NNPC Group General Manager, Group Public Affairs Division, Mr. Ndu Ughamadu, quoted Kyari as describing the funding arrangement as “a game changer to oil and gas project financing in Nigeria”.
Kyari, who was represented by the corporation’s Chief Operating Officer (COO), Upstream, Mr. Roland Ewubare, thanked the president for approving the transaction, adding that OML 13 held strong potentials both for the petroleum industry and the nation’s economy.
He said the federal government was 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.
According to Kyari, the acreage boasts of over 926 million stock tank barrels (mmstb) and 5.24 trillion cubic feet (tcf) respectively of oil and gas reserves.
He added that the Financing and Technical Services Agreement is for a period of 15 years, 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 7,900 barrels per day is expected from the project by April 1, 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.
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.