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The Nigerian National Petroleum Corporation has inked new investment deals with four oil companies including Chevron, Shell, Total, and Eni for the development of untapped fields both onshore and offshore. The deals are part of efforts on the part of the Nigerian government to boost crude oil production.
One of the deals is with Chevron and concerns the development of two new offshore oil blocks, according to Platts. Their development should increase the country’s reserve base by 211 million barrels of crude and 1.9 trillion cu ft of gas.
According to a report from Nigerian Daily Trust, the project, Sonam, will supply 215 million cu ft of natural gas per day and 30,000 barrels of per day to the Nigerian market. First production is slated for later this year. Chevron has 40 percent in the project.
The second deal involves the other three companies, which will develop 12 so-called oil mining licenses and 30 fields in the Niger Delta. The development of these deposits has been delayed for lack of funds for years, the NNPC noted.
Part of the reason these projects have been delayed is a debt of about US$5.1 billion that Nigeria owes to five international oil companies. Earlier this year, in April, Oil Minister Emmanuel Ibe Kachikwu announced that Abuja would start repaying its debt to Exxon, Shell, Chevron, Total, and Eni, which cleared the way for negotiations on further investments by these companies in the West African country’s oil industry.
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The five majors account for 80 percent of Nigeria’s oil extraction through joint ventures with the Nigerian National Petroleum Corp. The debt was incurred as a result of NNPC’s inability to hold up its end of the bargain with regard to investments to be made by the joint ventures.
Nigeria pumped about 1.77 million bpd last month and plans to raise this to 1.8 million bpd before hitting the brakes on production growth to support its OPEC co-members in their price-raising efforts.
By Irina Slav for Oilprice.com
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Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry.