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Chevron’s Nigerian unit and the Nigerian National Petroleum Corporation (NNPC) have signed the second and final phase of a US$1.7-billion alternative financing agreement for a joint project in Nigeria that is expected to boost the country’s crude oil production by 39,000 bpd in the long term, NNPC said on Sunday.
The joint venture of NNPC and Chevron Nigeria Limited (CNL) expects the project to boost production will cost some US$1.7 billion, of which US$780 million will be provided by third parties. In the first financing stage, Nigerian commercial banks provided US$400 million of the financing, while in the second stage, international commercial banks pledged to fund the project with US$380 million.
Of the CNL-NNPC joint venture financing, Chevron’s co-lending amounts to US$312 million and NNPC’s share of the funding is US$468 million, the Nigerian company said.
The project is planned to produce natural gas liquids and condensate extracted from the Sonam and Okan fields located in OML 90 and 91 in the Niger Delta. Under the deal, the parties will also complete the Sonam non-associated gas well platform; drill seven wells in the Sonam field and the Okan 30E NAG well; and complete a pipeline and Okan pig receiver platform and development of the associated facilities.
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“We know the important role gas supply to the domestic market plays in growing power generation. We also understand government’s need to seek alternative sources to fund profitable and bankable JV Projects,” CNL Managing Director Jeff Ewing said in NNPC’s statement.
Chevron, through its key subsidiary CNL, operates and holds a 40-percent interest in eight concessions in the onshore and near-onshore regions of the Niger Delta under a joint-venture arrangement with the NNPC. Chevron also does business through other subsidiaries in Nigeria.
Last year, Chevron’s net daily production in Nigeria averaged 204,000 barrels of crude oil, 159 million cubic feet of natural gas, and 4,000 barrels of liquefied petroleum gas (LPG).
By Tsvetana Paraskova for Oilprice.com
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews.