NNPC inks deals with Chevron, Shell

The Nigerian National Petroleum Corporation signed two alternative financing deals set to generate total revenues of USD 16 billion for the government, the NOC announced Thursday.

NNPC’s deal with Chevron will cover the USD 780 million required to complete the Sonam project in the next three to six months. The first phase will involve 10 workovers and the second part 14 new wells and three workovers. Production is expected to plateau at 39,000 bopd and 8.02 mcm (283 mcf) per day and will net USD 7.3 billion for the federal government.

The agreement with Shell facilitates the development of the Santolina project, which covers 12 OMLs and 30 fields and will require third-party financing of USD 1 billion. It was not specified whether this was included in the deal. The development is expected to generate USD 9 billion for the government.

“NNPC’s objectives in securing third-party financing for the two sets of projects aligned with government’s aspiration to increase reserves and crude oil and gas production as well as monetise the nation’s enormous gas resources,” the company statement read.

Due to parliamentary delays, the NOC has faced challenges meeting its share of project costs. In May 2017, Minister of State for Petroleum Resources Emmanuel Kachikwu said the country had begun repaying IOCs its cash call debt over 2016, but stressed that this was a separate repayment scheme from a USD 5.1-billion settlement with Chevron, Eni, ExxonMobil, Shell and Total on exploration and production costs.