A Review of the Nigerian Energy Industry

$380m Sonam, Okan agreement step in right direction – NNPC

*Dr. Maikanti Baru.

Ike Amos

22 November 2017, Sweetcrude, Abuja – Group Managing Director of the Nigerian National Petroleum Corporation, NNPC, Dr. Maikanti Baru, has described the deal by the corporation and Chevron Nigeria Limited, CNL, to raise $380 million from a consortium of international commercial banks to finance the developments of a number of projects in the Sonam and Okan wells in Oil Mining Leases 90 and 91 as a step in the right direction.

Baru said this would grow the nation’s daily oil production and support the Federal Government’s strategic domestic gas-to-power aspirations.

A statement by NNPC’s Group General Manager, Group Public Affairs Division, Mr. Ndu Ughamadu, which quoted Baru, said the agreement signed in London, would increase Nigeria’s crude oil production by 39,000 barrels per day and also boost gas output by 283 million standard cubic feet per day.

The NNPC stated that in carrying out the project, together with Chevron, it adopted a 2-staged financing approach, declaring that while Stage 1 which provided $400 million sourced from Nigerian Commercial Banks, NCBs, achieved financial close on August 1, 2017, Stage 2 (signed on Sunday) will provide $380 million from International Commercial Banks, ICBs.

Out of the US$780 million total financing for both stages, the statement said Chevron’s co-lending totals $312 million while NNPC’s portion of the total facility stands at $468 million.

Baru, who signed on behalf of the corporation, said the increment to be achieved by the agreement would spread over the remaining life of the asset, until 2045.

According to him, the project, which is about 92% completed, will cost about $1.7 billion, with $780 million expected to be funded by third-party, while it will produce natural gas liquids and condensate extracted from the Sonam and Okan fields located in OML 90 and 91 in the Niger Delta.

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