Nigeria’s state oil corp, the Nigerian National Petroleum Corporation (NNPC), said Monday that it has secured $3.15 billion in financing to boost crude oil reserves and daily oil production to 3 million barrels per day, in a signed 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).
The financing is seen as “a game changer to oil and gas project financing in Nigeria” by the Group Managing Director of NNPC, Mallam Mele Kyari, and will help the corporation develop an Oil Mining Lease (OML) 13, Per Second News (PSN). OML 13, 100 per cent owned by the NPDC and located in the eastern axis of the Niger Delta covering a total area of 1987km², will boost the country’s crude and gas reserves by as much as 926 million stock tank barrels (mmstb) and 5.24 trillion cubic feet (tcf) respectively, the corporation said in a written statement signed by Ndu Ughamadu, its Group General Manager, Group Public Affairs Division.
Nigerian government is expected to earn more than $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, from the new deal signed under a Financing and Technical Services Agreement, which will run for the period of 15 years, according to the corporation.
The $3.15 billion ceiling funding would be provided by SEEPCO with a 10-year capital investment period and five years for cost recovery.